3 Top-Ranked Stocks Breaking Records on AI-Related Demand

The Zacks Artificial Intelligence thematic screen features a diverse set of companies involved in the AI frenzy, ranging from creators of software and hardware that power AI to those applying and utilizing the technology through automation, diagnostics, cognitive tasks, and more.

The screen returned several top-ranked stocks, including Micron MU, NVIDIA NVDA, and Hewlett Packard Enterprise HPE. All three companies have recently posted stellar quarterly results, with favorable near-term earnings estimate revisions helping keep the near-term momentum picture intact. 

To view all stocks that the screen returned, please click here - Zacks Artificial Intelligence Thematic Screen

Micron Crushes Again

Micron’s latest earnings release was again rock-solid, as Q4 revenue reached a record $54.2 billion, up 31% sequentially and 379% year over year. Pricing remained a major tailwind, as DRAM revenue climbed 27% sequentially to a record $39.8 billion, while NAND revenue jumped 42% to $14.1 billion, both beating our consensus estimates handily. The strong pricing environment helped push its adjusted gross margin to an impressive 87%.

Micron expects fiscal Q1 revenue of $61.5 billion at the midpoint, alongside adjusted EPS of $38.15. Management also expects sequential revenue growth in every quarter of fiscal 2027 and sees DRAM and NAND markets remaining supply-constrained throughout calendar 2027 and 2028, keeping the overall outlook strong.

NVIDIA’s Historical Growth

NVIDIA’s latest results were similarly rock-solid, with revenue surging 106% year over year to $96.2 billion and continuing to reflect red-hot demand. Data Center results remained the quarter's highlight, with sales of $89.0 billion up 117% year over year and 18% sequentially, also handily clearing our consensus estimate of roughly $85.1 billion.

The stock is currently a Zacks Rank #1 (Strong Buy), with EPS revisions continuing the multi-year trend of moving higher on robust results. The stock undoubtedly continues to reflect one of the strongest bets on the continued AI craze, underpinned by red-hot demand that isn’t going to slow anytime soon.

HPE Breaks Records

HPE’s latest release was packed with records, with quarterly revenue climbing 34% YoY to $12.2 billion. Earnings of $1.02 similarly grew by an impressive 55% YoY, with both items clearing our consensus expectations nicely. Sales growth has clearly accelerated recently, with sales climbing by double-digit percentages for five consecutive periods.

Growth momentum in the above-mentioned release was driven by its Networking and Cloud & AI businesses. Networking revenue soared 75% YoY, while Cloud & AI revenue climbed 25%, underpinned by 35% growth in Server sales. Record orders and backlog also encouraged HPE to raise its FY26 outlook, further strengthening its current momentum story. EPS revisions remain bullish across the board, with earnings expected to climb nearly 100% in its current FY26 and an additional 20% in FY27.

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

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