Wall Street’s romance with artificial intelligence (AI) continues. AI stocks have largely been responsible for the broader market rally over the past couple of years. And the optimism appears to have amplified this year, with big tech companies making massive investments in AI lately.
Needless to say, the AI space continues to be rock solid, driven by a highly optimistic demand outlook. Given this scenario, we recommend two AI-focused large-cap stocks from this space, namely Micron Technology, Inc. MU and ASML Holding N.V. ASML, that have strong potential for 2025 and the coming year. Each of the stocks has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Money Pouring Into AI Space
Big tech companies have been making robust spending on AI this year, fueled by a bullish demand scenario. Massive spending on AI infrastructure should bring about changes in the robotics, healthcare, hyperscale automation, materials, energy, financials and cybersecurity spaces across the world in the coming years.
On Monday, Amazon.com, Inc. AMZN announced that it struck a $38 billion deal with OpenAI. The deal will now allow the ChatGPT maker to expand its AI workloads using Amazon Web Services’ cloud platform. This will also see millions of NVIDIA Corporation’s NVDA GPU chips being used in the process.
The same day, Microsoft Corporation MSFT and data center company IREN Limited IREN struck a $9.7 billion deal that will allow the tech giant access to Nvidia GB300 GPUs.
Last week, NVIDIA announced at its GTC conference that it will make artificial intelligence supercomputers for the U.S. energy sector. The AI-chipmaker also said that it will take a $1 billion stake in Finnish company Nokia. The telecom giant will use part of this funding to support its AI initiatives.
Big Tech Gains From AI Investment
Quarterly results of at least three “magnificent 7” companies have reconfirmed that AI-related spending has been benefiting them. Last week, Microsoft reported first-quarter fiscal 2026 earnings of $4.13 per share, beating the Zacks Consensus Estimate of $3.65. The company reported revenues of $77.67 billion, also surpassing the Zacks Consensus Estimate by 3.62%.
Microsoft’s flagship product, Azure, saw revenues jump 40% year over year. Microsoft said that its capital expenditures in the reported quarter totaled $34.9 billion, with a significant portion allocated to developing AI-driven data center infrastructure.
The same day, Alphabet Inc. GOOGL reported third-quarter 2025 earnings of $2.87 per share, beating the Zacks Consensus Estimate of $2.26 per share. The company posted third-quarter 2025 revenues of $87.47 billion, outpacing the Zacks Consensus Estimate by 2.95%.
Alphabet attributed its robust performance to its AI-powered cloud business and has, for the second time, raised its 2025 capex in the range of $91-93 billion. The company also said that its capex for its AI-powered data center will also see a robust jump in 2026 and every year.
Another tech giant, Meta Platforms, Inc. META reported third-quarter 2025 earnings of $7.25 per share, surpassing the Zacks Consensus Estimate of $6.61. The company reported revenues of $51.24 billion for the quarter, outpacing the Zacks Consensus Estimate by 3.63%. In the reported quarter, Meta made $50.08 billion in advertising revenues driven by AI, marking a solid 25.6% jump year over year.
In 2025, Meta made robust investments to revamp its AI operations following the underwhelming launch of its open-source Llama 4 software in April.
2 AI-Focused Stocks With Upside
Micron Technology, Inc.
Micron Technology, Inc., through global brands, namely Micron, Crucial and Ballistix, manufactures and markets high-performance memory and storage technologies, including Dynamic Random Access Memory (DRAM), NAND flash memory, NOR Flash, 3D XPoint memory and other technologies. MU’s solutions are used in leading-edge computing, consumer, networking and mobile products. Micron continues to benefit from the surging demand for high-performance computing components for AI, data centers, and mobile devices.
Micron Technology’s expected earnings growth rate for the current year is 95.7%. The Zacks Consensus Estimate for current-year earnings has improved 24.4% over the last 60 days.
ASML Holding N.V.
ASML Holding N.V. is a world leader in the manufacture of advanced technology systems for the semiconductor industry. Last month, ASML made €1.3 billion investment in French company Mistral AI, which specializes in large language models. The deal gives reflects ASML’s push to embed AI more deeply into its lithography systems to boost productivity, precision, and chip yields for customers.
ASML Holding’s expected earnings growth rate for the current year is 39.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the last 60 days.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
ASML Holding N.V. (ASML) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
IREN Limited (IREN) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
