2 Best AI Stocks Up 100%+ in 2025 and Still a Buy for 2026

The artificial intelligence (AI) boom has significantly boosted Micron Technology, Inc. MU and Palantir Technologies Inc. PLTR, with their shares soaring 195.3% and 145.5%, respectively, so far this year. However, investors who haven’t capitalized on their growth story still have reason for optimism. Heading into 2026, both AI players have ample room to expand, banking on strong AI-driven growth, and analysts remain bullish on their upside potential. Let’s take a closer look –  

Micron Rallies on AI-Driven HBM Demand, Strong Results Ahead 

In recent times, Micron’s high-bandwidth memory (HBM) chips have seen exceptionally strong demand due to tight supply amid the ongoing expansion of AI infrastructure. As a result, Micron’s revenues for first-quarter fiscal 2026 came in at $13.64 billion, representing a 56.8% year-over-year increase, as mentioned on investors.micron.com. 

Revenue growth was broad-based across all business units. In particular, the cloud memory business segment stood out, reporting sales of $5.28 billion for the quarter, up an impressive 99.5% year over year. This robust top-line performance translated into significant profit gains, with Micron reporting non-GAAP net income of $5.48 billion, or diluted earnings per share (EPS) of $4.78. 

Moreover, surging AI-related demand for Micron’s HBM chips has prompted the company to project fiscal second-quarter 2026 revenues in the range of $18.3 billion to $19.1 billion, with diluted EPS expected between $8.22 and $8.62. The record free cash flow of $3.9 billion generated in the fiscal first quarter of 2026 also gives the company financial strength to support its future growth initiatives. 

Against this favorable backdrop, Micron’s expected earnings growth for the next year is a solid 23.9%, making it a compelling buy. Brokers are also optimistic about the company’s future growth, estimating an average short-term price target for MU stock at $252.44, an 11.9% increase from the last closing price of $225.52. The highest target is $362, suggesting a potential upside of 60.5%. 

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Commercial and Government Demand Spurs Palantir’s Growth  

Palantir’s revenues in the third quarter came in at $1.18 billion, up 63% from the same period a year ago and 18% quarter over quarter, according to investors.palantir.com. Most importantly, sales improved in both the U.S. commercial and government segments. Revenues from the U.S. commercial segment were $397 million for the quarter, up 121% year over year and 29% sequentially. Government revenues were $486 million, up 52% from a year ago and 14% from the last quarter. 

This growing base of U.S. commercial clients points to Palantir’s potential growth, while the increase in government contracts creates meaningful barriers to entry. Notably, increasing adoption of Palantir’s Artificial Intelligence Platform (AIP) among both the U.S. commercial sector and the government segment not only boosted last quarter’s earnings but also is expected to fuel the company’s future profitability. 

On this positive note, Palantir is projected to deliver solid earnings growth of 42.5% next year, making it an attractive investment choice. Brokers are equally bullish about the company’s growth prospects, estimating an average short-term price target for PLTR stock at $192.67, up 8.7% from the last closing price of $177.29. The highest target is $255, implying a potential upside of 43.8%.

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Currently, Micron sports a Zacks Rank #1 (Strong Buy), while Palantir has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
 

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

Zacks Investment Research