Reasons to Buy These 2 AI Stocks Offering Triple-Digit Returns in 2025

The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to unfold fully. Solid demand from AI infrastructure end markets such as hyperscale automation, robotics, healthcare, energy, materials, financials and cybersecurity will dramatically change this space over the next five years.

Here, we recommend two AI infrastructure developers that have skyrocketed in 2025 with more than 200% returns. Yet their diversified products for AI infrastructure and strong demand will ensure growth in the future. 

These two stocks are: Applied Digital Corp. APLD and Lumentum Holdings Inc. LITE. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The chart below shows the price performance of our two picks year to date.

Applied Digital Corp.

Zacks Rank #2 Applied Digital is a U.S. designer, developer, and operator of high-performance data centers for AI and blockchain workloads. APLD’s long-term prospects ride on accelerating spending on AI infrastructure by hyperscalers. The global AI market is expected to hit $500 billion by 2027. 
AI needs data centers with high power density, as well as changing power and cooling requirements. Hyperscalers require high-capacity data centers to meet the escalating power needs of AI and GPU-driven applications. These factors bode well for APLD’s prospects. 

Innovative Product Portfolio

APLD’s HPC pivot is anchored by multi-year leases at its Ellendale campus (Polaris Forge 1), which expanded from 250 MW in May 2025 to a fully leased 400 MW by August 2025 with a single hyperscaler tenant, CoreWeave Inc. CRWV. Management cites approximately $11 billion of anticipated contracted lease revenue across roughly 15 years.

APLD targets 12-14 month build timelines, shortened from approximately 24 months previously, and is scaling to develop multiple campuses in parallel, with 700 MW under construction. Design features include direct-to-chip liquid cooling with a design PUE target of 1.18 and near-zero water use, leveraging over 200 days of natural cooling in the Dakotas. 

These capabilities, cited across 2025 and the first quarter of fiscal 2026, differentiate Applied Digital as data center power constraints tighten and hyperscaler demand accelerates. A proven design-and-deliver model, evidenced by recent fit-out activity and full campus leasing, increases the likelihood of repeat wins and schedule adherence as projects ramp.

While the strategic focus is HPC, the Data Center Hosting business remains fully contracted at approximately 286 MW across two North Dakota sites and is operated at full capacity as of Aug. 31, 2025. The legacy hosting base offers operational continuity and cash generation support that can complement the staged conversion toward long-duration, hyperscaler-backed data center rental economics.

Strong Estimate Revisions

Applied Digital has an expected revenue and earnings growth rate of 30.4% and 61.3%, respectively, for the current year (ending May 2026). The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the last 60 days.

APLD has an expected revenue and earnings growth rate of 92.7% and more than 100%, respectively, for next year (ending May 2027). The Zacks Consensus Estimate for next year’s earnings has improved 25% over the last 60 days.

Lumentum Holdings Inc.

Zacks Rank #1 Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of artificial intelligence, cloud computing, 5G connectivity, and beyond.

Solid Product Portfolio

LITE’s industrial lasers are used in precision manufacturing, such as cutting semiconductors and solar cells. LITE also develops 3D sensing laser diodes for applications like facial recognition in smartphones and autonomous vehicle sensors.

Shares of Lumentum have gathered momentum in the past three months boosted by growing AI demand. LITE is developing and providing photonic solutions for AI applications, particularly for data centers. LITE’s major AI-enabled offerings are high-speed transceivers, optical circuit switches, and lasers that enable faster, more efficient, and scalable AI infrastructure. 

Moreover, LITE has a strong collaboration with NVIDIA Corp. NVDA in developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.

Strong Estimate Revisions

Lumentum Holdings has an expected revenue and earnings growth rate of 56% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 60 days.

LITE has an expected revenue and earnings growth rate of 31.4% and 41.9%, respectively, for next year (ending June 2027). The Zacks Consensus Estimate for next year’s earnings has improved 13.1% over the last 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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