Investors are feeling more optimistic about the health of the U.S. economy following robust second-quarter earnings reports. In response, Jefferies has raised its year-end target for the S&P 500 index to 6,600, indicating that corporate America is performing better than anticipated. This increase is a significant shift, as Jefferies had previously predicted the benchmark index would fall below 6,000 to around 5,600. Other major brokerages, including UBS, Citigroup, and HSBC, have also adjusted their targets upward.
According to Desh Peramunetilleke, a Jefferies analyst, the strong performance of AI-related companies, particularly the “Magnificent Seven,” has been instrumental in driving these market gains. Companies in this space are expected to benefit from the resilient macroeconomic backdrop that has emerged from recent financials.
In light of this positive sentiment, analysts have identified ten AI stocks that are gaining traction among investors and hedge funds. The data used in this analysis is based on hedge fund holdings as of the second quarter of 2025, reflecting a wider interest in AI investments.
Baidu, Inc. and CoreWeave, Inc.: Key Players in AI
Baidu, Inc. (NASDAQ:BIDU) stands out with 33 hedge fund holders. On August 21, Benchmark analyst Fawne Jiang lowered the price target for Baidu from $120.00 to $115.00, while maintaining a Buy rating. This adjustment highlights challenges in Baidu’s core advertising business, which experienced a 15% year-over-year revenue decline in the second quarter of 2025. Despite this, Baidu’s non-advertising revenue, driven by strong AI Cloud growth, is gaining momentum, accounting for an estimated 40% of Baidu’s core revenue.
Meanwhile, CoreWeave, Inc. (NASDAQ:CRWV) has attracted 36 hedge fund holders. On August 21, H.C. Wainwright analyst Kevin Dede upgraded the stock from Neutral to Buy, setting a price target of $180.00. CoreWeave has faced some selling pressure, attributed to early investor liquidation following a lockup expiration. However, Dede pointed to an uptick in revenue guidance as a positive indicator for the company’s future performance.
Prominent Tech Giants on the Radar
Other notable mentions include Dell Technologies Inc. (NYSE:DELL) and Hewlett Packard Enterprise Company (NYSE:HPE). Dell, with 54 hedge fund holders, saw an upgrade from Morgan Stanley on August 21, which raised its price target to $144.00 from $135.00. The firm anticipates strong performance in the enterprise hardware sector, driven by robust AI expenditure.
Hewlett Packard Enterprise, with 60 hedge fund holders, also received an upgrade from Morgan Stanley on August 21, with a new price target of $28.00. Analysts noted increased corporate spending on HPE’s AI and related products, positioning the company favorably ahead of its upcoming Analyst Day on October 15.
Another key player is Intel Corporation (NASDAQ:INTC), which has 82 hedge fund holders. On August 25, Bernstein SocGen Group analyst Stacy Rasgon reiterated a Market Perform rating with a price target of $21.00. Despite a recent agreement involving the U.S. government purchasing $8.9 billion in Intel stock, Rasgon advised caution due to ongoing structural issues.
Other companies included in the spotlight are Workday, Inc. (NASDAQ:WDAY), Snowflake Inc. (NYSE:SNOW), Broadcom Inc. (NASDAQ:AVGO), Apple Inc. (NASDAQ:AAPL), and NVIDIA Corporation (NASDAQ:NVDA). Each of these firms is navigating the evolving AI landscape, with analysts projecting various growth trajectories based on recent performance and market conditions.
This focus on AI stocks reflects a broader trend among hedge funds and individual investors looking to capitalize on opportunities within the technology sector. As the demand for AI solutions continues to rise, market analysts will likely keep a close eye on these companies to gauge their performance and potential for growth in the coming months.
