MW 30 AI stocks that could surge up to 73% - and are loved by a bullish tech analyst

By Laila Maidan

Nvidia and Apple make the cut, along with a host of software stocks

Artificial intelligence has been referred to as the fourth industrial revolution. The technology is expected to advance society to the degree that things like the steam engine, electricity and the internet once did.

Wedbush Securities senior equity analyst Daniel Ives, known for his vocal and bullish stance on tech stocks, has referred to AI as "the biggest tech transformation in over 40 years." He estimates that the global AI market is expected to grow to $407 billion by 2027 and to $1.81 trillion by 2030, at a compound annual growth rate of 36%.

But AI isn't a recent development. Its gradual evolution has been ongoing for a few decades. However, the release of ChatGPT and apps that can be used by the average person has brought widespread attention to AI, triggering a race by firms to develop and deploy it.

The buildout phase has a few stages, starting with companies tasked with doing infrastructure development around data centers and the electric grids that power them. Then there are the hyperscalers that provide cloud services to run and train large language models, as well as cybersecurity providers to protect data. Finally, there are companies that will deploy AI through software applications and the internet, allowing people to put it to use.

Ives recently released a list of 30 AI-related companies he believes will be key to the revolution, breaking them down by segments. Below is the list - separated by sectors including semiconductors and hardware, hyperscalers, consumer internet, cybersecurity and software, as well as companies involved in autonomous and robotic technologies.

MarketWatch added a column consisting of data compiled from FactSet that shows each stock's potential upside or downside based on Thursday's closing price and analysts' price targets.

Semiconductors and hardware

Companies within this segment create the semiconductors and hardware materials used to build the computers and components to host AI data centers. Wedbush analysts noted that the global semiconductor market is expected to see a boost by further developments in AI, 5G and the internet of things, and their increased use in government and enterprise.

When it comes to the hardware required to support AI's large compute power, Nvidia Corp. $(NVDA)$ tops Wedbush's list of stocks as the leading provider of graphics processing units for data centers and gaming. It's also expected to benefit from supplying the autonomous-vehicles sector as it develops. Similarly, Advanced Micro Devices Inc. $(AMD)$ supplies central processing units used for computers and gaming.

   Company                                      Ticker    % Upside Potential 
   Micron Technology Inc.                       MU                       45% 
   Nvidia Corp.                                 NVDA                     37% 
   Advanced Micro Devices Inc.                  AMD                      28% 
   Taiwan Semiconductor Manufacturing Co. Ltd.  TSM                      26% 
   Broadcom Inc.                                AVGO                     15% 

Hyperscalers

The hyperscaler companies are the cloud providers that help store, train and process large amounts of data. Wedbush analysts refer to this group as "the immediate beneficiaries of the AI revolution," with 15% of cloud services now having AI integration. Companies within this segment are expected to be key players in the development of AI, with spending on AI expected to top $325 billion for 2025.

In this group, Microsoft Corp.'s $(MSFT)$ suite of office products is a great starting base for integrating AI tools, and the company is ramping up prices for its offerings. Microsoft's Azure cloud-computing division is a favorite among enterprise customers.

While Alphabet Inc.'s stock $(GOOG)$ $(GOOGL)$ is a bit more contested because it could lose search-engine volume and advertising dollars to AI, the company is also well positioned to take advantage of the technology. Investors are closely watching whether Google can continue to grow its cloud business in large strides.

   Company           Ticker    % Upside 
   Alphabet Inc.     GOOG            31% 
   Amazon.com Inc.   AMZN            25% 
   Oracle Corp.      ORCL            18% 
   Microsoft Corp.   MSFT            15% 

Consumer internet

According to Wedbush analysts, this segment of companies can monetize AI in four ways. They include providing AI agents, further automating and optimizing advertising tools and pricing for ads, improving search capabilities and the ability to recommend content, and integrating generative AI into hardware products.

Apple Inc. $(AAPL)$ has a rich ecosystem of apps that makes its products sticky, meaning customers tend to remain loyal to the brand. It's also working on its own version of AI called Apple Intelligence, which boasts privacy and data-safety advantages. However, the stock has taken a hit due to the looming threat of tariffs, as investors try to digest the possible impacts to its supply chain.

Meta Platforms Inc. $(META)$ is largely dependent on ad revenue, and any advancements to its AI capabilities are expected to help improve its ad-targeting tools. The social-networking giant is also building out its large language model, which competes with the likes of Google's Gemini and OpenAI's ChatGPT. On this front, investors are watching for how the company will be able to monetize its efforts. Wedbush analysts believe that Meta can spend big on AI without cause for investor concern, because it is growing its expenses more slowly this year.

   Company                     Ticker    % Upside Potential 
   Alibaba Group Holding Ltd.  BABA                     32% 
   Baidu Inc.                  BIDU                     25% 
   Apple Inc.                  AAPL                     18% 
   Meta Platforms Inc.         META                     17% 

Cybersecurity

These companies are leaders in the cybersecurity space, and investing in their services will be critical for companies that want to protect their data. Wedbush estimates that cybercrime will cost firms $23 trillion by 2027, a sharp increase from $10.5 trillion in 2025.

Palo Alto Networks Inc. (PANW) is well positioned to be a beneficiary of the growing demand for cybersecurity. Wedbush analysts believe that its move to combine its services into a single platform is a good business decision that will help it gain market share.

   Company                  Ticker    % Upside 
   CyberArk Software Ltd.   CYBR           22% 
   Palo Alto Networks Inc.  PANW           13% 
   Zscaler Inc.             ZS              2% 

Software

Software is the bridge between AI and the ability to put it to good use by people and companies. Stocks within this sector are expected to be big beneficiaries as they find new ways to deploy AI for solutions.

Palantir Technologies Inc. (PLTR) combines big data with AI to supply governments and companies with software that can optimize their internal processes. However, the stock recently changed hands near $117, above the consensus price target of about $100, following a strong April rally that was fueled by investor optimism over its future.

When it comes to customer-relations management $(CRM)$ platforms, Salesforce Inc. $(CRM.AU)$ is a favorite of Wedbush. Analysts at the firm are optimistic over its Agentforce platform, which allows enterprise customers to build out autonomous agents.

Wedbush analysts also refer to International Business Machines Corp. $(IBM)$ as one of their "top software names," as the company continues to spend on AI to benefit from productivity growth.

   Company                                Ticker    % Upside Potential 
   Innodata Inc.                          INOD                     65% 
   Elastic N.V.                           ESTC                     50% 
   MongoDB Inc.                           MDB                      46% 
   SoundHound AI Inc.                     SOUN                     43% 
   Salesforce Inc.                        CRM                      31% 
   Adobe Inc.                             ADBE                     26% 
   C3.ai Inc.                             AI                       24% 
   Snowflake Inc.                         SNOW                     15% 
   Pegasystems Inc.                       PEGA                     13% 
   ServiceNow Inc.                        NOW                      11% 
   International Business Machines Corp.  IBM                       0% 
   Palantir Technologies Inc.             PLTR                    -16% 

Autonomous and robotics

Robots and autonomous-driving vehicles were once the thing of movies - but they're expected to become a reality as AI integrates with machines.

Tesla Inc. $(TSLA)$ is a key player in the autonomous space. The company has captivated investor imaginations when it comes to its development of robots like Optimus and self-driving cars. However, the company's biggest opportunities are still in what feels like a distant future. For 2025, Tesla is expected to face a slowdown in sales for its core EV business.

   Company      Ticker    % Upside 
   Oklo Inc.    OKLO           74% 
   Tesla Inc.   TSLA            7% 

-Laila Maidan

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 10, 2025 08:30 ET (12:30 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.