10 AI Stocks in Focus on Wall Street

Core Viewpoint - The enthusiasm surrounding artificial intelligence (AI) stocks may be outpacing their underlying business models, raising concerns about sustainability and future performance [1][2]. Group 1: AI Market Dynamics - Significant spending on AI firms is not self-sustaining, with many companies relying on venture capital rather than established business models [2]. - OpenAI plans to spend approximately $1.4 trillion on computing resources over the next five years while still facing losses, indicating a reliance on external funding [3]. - Structural challenges such as energy supply constraints, data center limitations, and community resistance could pose risks to AI stocks [3]. Group 2: Viability of AI Products - The majority of users (95%) utilize Large Language Models (LLMs) like ChatGPT for free, raising doubts about the ability to monetize these products effectively [4]. - Competitive pressures are increasing, with Chinese companies offering similar LLM capabilities for as low as $3 per month [5]. Group 3: Hedge Fund Interest - Hedge funds are focusing on AI stocks, as research indicates that mimicking top hedge fund stock picks can lead to market outperformance [6]. - The article highlights specific AI stocks that are popular among hedge funds, indicating a trend in investment strategies [5]. Group 4: Company-Specific Insights - Bloom Energy Corporation (NYSE:BE): - The stock has 64 hedge fund holders, with Jefferies raising its price target to $92.00 while maintaining an Underperform rating due to high expectations and execution risks [8][10]. - Anticipated 2026 revenue is projected to reach $2.9 billion, 16% higher than consensus estimates, driven by AEP and Quanta orders [9]. - The company develops solid-oxide fuel cell systems for on-site power generation, catering to the energy demands of AI data centers [11]. - International Business Machines Corporation (NYSE:IBM): - The stock has 66 hedge fund holders, with Evercore ISI reiterating an Underperform rating and a price target of $330.00 ahead of its earnings report [12]. - Expected revenue is around $19.2 billion with earnings per share of $4.29, supported by momentum in the Infrastructure segment and cost-saving initiatives [14][15]. - Investors are also interested in AI bookings and revenue details as part of IBM's ongoing AI consulting services and software offerings [16].