Investment in artificial intelligence (AI) is gaining momentum, with numerous stocks showing promising potential for growth. According to research from Goldman Sachs, the US economy is expected to experience a growth rate exceeding 2% over the next few years, largely fueled by advances in AI technology. This growth is anticipated as productivity increases, especially within the tech sector, where innovations in AI are significantly enhancing output.
As global venture capital investments in AI continue to rise, especially noted in a report from KPMG, the interest from investors is reflected in the substantial funding rounds being attracted by AI-focused companies. This trend indicates a sustained commitment to developing AI models and applications across various industries. With this in mind, we delve into the 14 most promising AI stocks to consider for investment.
Promising AI Stocks to Watch
The following stocks have been identified based on extensive research and popularity among hedge funds as of the second quarter of 2025. These selections are intended to help investors align with trends that have shown potential for outperforming the market.
1. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 33
On October 15, analyst Saiyi He of CMB International Securities reaffirmed a “Buy” rating for Baidu, setting a price target of $148.40. Despite expected declines in core advertising revenues, growth in cloud services related to AI technologies offers a promising counterbalance. The company reported cash reserves of RMB124.2 billion (approximately $17.34 billion) as of June 30, 2025.
2. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 48
On October 14, Super Micro launched its Data Center Building Block Solutions (DCBBS), which streamline the design and construction of data centers. The company’s liquid-cooling technology can reduce power consumption by up to 40%, enhancing its appeal amid increasing demand for efficient data solutions. Super Micro expects revenue for fiscal year 2026 to reach at least $33 billion.
3. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
Analyst Derrick Wood from TD Cowen maintained a “Buy” rating on October 23, with a price target of $1,200.00. ServiceNow is set to report strong Q3 results, driven by robust federal bookings and growing AI adoption. The company is positioning itself as a leader in AI monetization, aiming for $1 billion in annual contract value from AI products by 2026.
4. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 109
On October 14, Goldman Sachs raised its price target on AppLovin from $445 to $630. The company anticipates sustaining ad revenue growth from mobile gaming, projecting Q3 revenues between $1.320 billion and $1.340 billion.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 113
Analyst Matt Bryson from Wedbush raised AMD’s price target from $190 to $270 on October 15, following significant partnerships with Oracle and OpenAI. These collaborations are expected to enhance future GPU revenue, reflecting strong demand in both PC and server segments.
Leading Tech Innovators in AI
The following companies have also been recognized for their potential in the AI sector, supported by strategic initiatives and solid financial backing.
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
On October 16, reports emerged of NVIDIA partnering with Australian startup Firmus Technologies to build renewable energy-powered AI data centers in Melbourne and Tasmania. This project, worth approximately A$4.5 billion (around $2.9 billion), underscores NVIDIA’s commitment to sustainable AI infrastructure.
7. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 335
On October 24, Wedbush analyst Scott Devitt raised Amazon’s price target from $250 to $280 ahead of its Q3 earnings report. The company’s strong cloud backlog and retail momentum position it well for sustained growth.
8. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
On October 20, Oppenheimer adjusted its price target for Alphabet to $300, citing optimism surrounding the company’s partnership with Anthropic, which is expected to enhance its cloud services.
9. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 260
Analyst Brian White from Monness maintained a “Buy” rating on October 22, emphasizing Meta’s aggressive AI initiatives that are likely to drive advertising revenue growth.
10. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
On October 20, BofA analyst Brad Sills reaffirmed a “Buy” rating for Microsoft, highlighting its strategic investments in AI infrastructure, which are expected to enhance growth.
As AI technology continues to evolve, these companies represent substantial investment opportunities. The projected growth rates and strategic initiatives in the sector suggest that AI stocks may provide lucrative returns for savvy investors in the coming years.