As 2024 comes to an end, the growing adoption of artificial intelligence (AI) continues to drive impressive gains in technology stocks, and this trend is expected to persist into 2025. Market researcher IDC forecasts that global AI-related spending could reach $337 billion next year, with projections soaring to $749 billion by 2028. With AI demand accelerating, companies offering AI-related hardware and software are poised for strong growth.
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In this article, we highlight three “Strong Buy” AI stocks poised for growth in the upcoming year, each offering more than 15% upside potential over the next 12 months.
NVIDIA Corporation
First on the list is NVIDIA Corporation (NVDA), a dominant force in AI hardware, particularly known for its powerful GPUs that are essential for AI training and inference. As AI technologies continue to evolve, NVIDIA’s GPUs are at the core of AI-driven applications, from data centers to autonomous vehicles. With the demand for AI processing power skyrocketing, NVIDIA’s leadership in AI hardware positions it for strong growth in 2025 and beyond.
NVDA has surged 182% year-to-date and 173% over the past year. Building on these remarkable gains, Truist Financial raised Nvidia’s price target to $204 from $169 while maintaining a Buy rating. Despite a cautious outlook on the semiconductor and artificial intelligence sectors, the firm holds a more optimistic view of Nvidia. The analyst anticipates 2025 to be another strong year for the company, citing widespread industry confidence in Nvidia’s comprehensive technology stack. Additionally, Nvidia is expected to introduce a client-side CPU in 2025, potentially tapping into a $35 billion total addressable market, the analyst noted in a research report.
Overall, NVDA has a Strong Buy consensus rating based on 33 Buys and three Holds assigned in the last three months. The shares are currently priced at $134.70, and their $177.68 average price target suggests a one-year increase of about 32%.
Micron Technology
Next is Micron Technology (MU), a key player in memory and storage solutions for the AI sector. As demand for high-performance memory grows with AI advancements, Micron is well-positioned to benefit. Its DRAM and NAND flash products are critical for AI applications, from data centers to autonomous vehicles. With AI-related spending expected to rise, Micron’s solid market presence and innovations make it a strong investment for 2025.
MU is up 7% year-to-date and 6% over the past year. In a recent note, analyst Jim Hin Kwong Au of DBS has issued a Buy rating, citing several factors that support Micron’s growth potential. He believes that the company is poised to capitalize on the rising demand for AI-driven memory and storage solutions, which are projected to grow significantly over the next decade.
Overall, Micron has a Strong Buy consensus rating based on 22 Buys and two Holds assigned in the last three months. The shares are currently priced at $90.12, and their $137.17 average price target suggests a one-year increase of about 52%.
Microsoft Corporation
The third company on the list is Microsoft Corporation (MSFT), a prominent name in AI, utilizing its Azure cloud platform to deliver AI solutions across diverse industries. With tools like Azure AI and the integration of AI into its productivity software (such as Microsoft 365), Microsoft is enabling businesses to automate tasks and improve decision-making. As AI adoption increases, Microsoft’s robust cloud infrastructure and AI capabilities make it a compelling investment for 2025.
MSFT is up 18% year-to-date and 17% over the past year. Building on this momentum, a five-star analyst, Brad Reback, from Stifel Nicolaus notes that after a shaky start to 2024, the enterprise software sector is “ending on a higher note.” He attributes this to improving revenue growth, early signs of AI monetization by major software firms, falling interest rates, among other things, with minimal exposure to tariffs or China. As a result, he raised the price target to $515 from $475 per share.
Overall, Microsoft has a Strong Buy consensus rating based on 24 Buys and two Sells assigned in the last three months. The shares are currently priced at $436.60, and their $502.56 average price target suggests a one-year increase of about 15%.
Summary
In conclusion, as AI adoption continues to drive technological advancements, NVIDIA, Micron, and Microsoft are well-positioned for significant growth in 2025. With strong market potential and promising forecasts, these stocks offer substantial upside for investors looking to capitalize on the AI boom.
