The biggest winners of the current bull market have been companies closely tied to the advancements in artificial intelligence. After zooming significantly higher over the last two years, many stocks appear fully priced. In fact, some AI darlings currently trade at prices higher than almost every analyst on Wall Street expects them to trade a year from now.
But there are still plenty of opportunities in artificial intelligence. Big tech companies expect to ramp up their spending on AI hardware and development in 2025 and beyond, and Wall Street analysts see several companies that could continue to climb from here.
Here are three AI stocks with up to 194% upside in 2025, according to select Wall Street analysts.
Rosenblatt analysts put a $250 price target on Micron shares, implying 194% upside on the stock from its price as of this writing. It’s worth noting that this price target came out before Micron’s recent first-quarter earnings. The company reported solid results, but its outlook disappointed investors, sending the shares lower. Rosenblatt’s analysts and other Micron bulls might suggest it’s an even better deal now despite the weak outlook.
The challenge for Micron is the cyclicality it’s facing for its consumer-focused chips. Management lowered its forecast for the next quarter due to customer inventory reductions from PC and smartphone suppliers. That slowdown has a significant impact on Micron because it manufactures its own chips, unlike many other chipmakers these days. That means it invests a lot of capital upfront in order to make better margins in the long run. But those profits can disappear if there’s not enough revenue to cover its cost of capital.
The good news is the demand for its HBM chips propelled its data center business to become the majority of its revenue. Data center revenue grew 400% in the first quarter from a year ago. That trend will get stronger in 2025, leading to significant upside for the stock.
With shares trading at an enterprise value-to-revenue multiple of just 3.6, there’s room for that multiple to expand. Revenue growth should remain strong in 2025, and it should show considerable profit improvements despite the headwinds of its consumer business. Analysts currently expect profits to grow from $1.30 per share to $8.90 in fiscal 2025 (ending in August). That gives it a forward P/E of less than 10 at its price as of this writing. Even if it doesn’t climb all the way to $250 over the next year, the stock looks like a bargain here.
Another semiconductor stock Rosenblatt’s analysts are bullish on is Advanced Micro Devices (NASDAQ: AMD). The semiconductor company makes GPUs and other AI accelerator chips that big tech companies use to train and run large language models for generative AI applications. Rosenblatt put a $250 price target on AMD shares as well, implying 106% upside from the price as of this writing.
Nvidia has been the dominant supplier of GPUs as tech companies build out their servers and data centers in a race to develop leading-edge generative AI capabilities. However, AMD presents a very strong second choice in the market and a viable alternative to Nvidia. That should ensure it maintains a presence in the growing market, as Nvidia’s AI customers will want to avoid putting all their eggs in one basket and becoming reliant on Nvidia’s chip supply.
AMD produced very strong results over the past year as it rides the growing demand for GPUs. Its data center revenue, which is primarily driven by AI accelerators, grew 122% in the third quarter from a year ago. Its gross margin expanded to 50%, up 3 percentage points. Combined, that led to considerable profit growth, up 31% on a per-share basis. However, that growth may be just getting started.
Revenue growth is set to accelerate in 2025 as AMD continues to advance its AI chip technology and more customers expand their use of AMD’s products in their data centers. AMD accelerated the timeline of its GPU development, with plans to launch its MI355X less than a year after the MI325X, which launched in October of this year. The MI400 Series will be available in 2026. Each will offer massive performance improvements as it looks to catch up to Nvidia and take some of its market share.
Meanwhile, AMD’s CPU business is performing well, as it’s successfully winning server market share. Its fabless model allows it to bring new products to market more quickly and take advantage of the best manufacturing technology available without major capital expenses. That’s helped provide a base level of growth for the chipmaker as it works to develop new AI chips.
AMD shares currently trade around 24 times forward earnings expectations. That’s a relatively low price, considering the consensus estimate calls for 54% earnings growth next year. Rosenblatt analysts think 25 times earnings is a fair multiple for AMD but see earnings climbing to $10 per share in 2026, giving it a $250 price target. Even if earnings climb to the Wall Street consensus of $6.56 per share in 2026, a 25 times multiple would put shares at $164 by the end of 2025, an upside of 35% from the share price as of this writing.
Dell (NYSE: DELL) is best known among consumers for its personal computers, but its growing server business has been the driving force behind its recent growth. Dell assembles and sells AI-optimized servers for data centers, and that business is growing fast. Its Infrastructure Solutions segment grew sales 34% year over year, with servers and networking up 58% in the most recent quarter.
Loop Capital has a $185 price target on the stock, which implies about 60% upside from the stock price as of this writing. This price target came ahead of Dell’s third-quarter earnings results in November, which disappointed many investors. That sent shares lower, but it may turn out to be a buying opportunity.
While Dell’s Infrastructure Solutions business is growing quickly, it’s being dragged down by its PC business. Its Client Solutions segment saw revenue decline 1% year over year last quarter. What’s more, Dell missed analysts’ total revenue expectations for the quarter, and its forecast fell short of what analysts were modeling as well.
However, management expects the PC market and traditional (non-AI) servers to undergo a refresh sometime next year, leading to strong growth in its lagging business segment. Meanwhile, AI demand will not dissipate any time soon. Management noted that it received $3.6 billion worth of orders for its AI servers last quarter, which compares favorably with the $2.9 billion in sales during the third quarter. Its total pipeline for AI server sales over the next five quarters grew 50% sequentially, so investors should see strong growth at least through fiscal 2026 (ending Jan. 2026).
Dell stock trades for just 12.2 times analysts’ earnings expectations for fiscal 2026. Considering the average analyst expects Dell to grow its earnings per share by about 20% next year, that presents a great price for the stock.
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Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
3 Artificial Intelligence (AI) Stocks With 60% to 194% Upside in 2025, According to Select Wall Street Analysts was originally published by The Motley Fool
