Investors shouldn’t underestimate the power of momentum. And two kinds of stocks have plenty of momentum these days: mega-cap monsters with market caps of $200 billion or more and stocks with a major focus on artificial intelligence (AI).
But can the high-flying ways of these stocks continue? Many analysts would answer that question with a resounding “yes.” Here are three mega-cap AI stocks Wall Street thinks will soar the most over the next 12 months.
1. Alibaba Group Holding
Wall Street is more bullish about Alibaba Group Holding Ltd. (BABA 6.29%) than any other AI stock. Alibaba’s average 12-month price target reflects an upside potential of around 40%. Optimism about the Chinese e-commerce and cloud services leader isn’t limited to just a few analysts, either. Of the 41 analysts surveyed by LSEG in January, 34 rate the stock as a “buy” or a “strong buy” with the remaining seven recommending holding Alibaba.
Alibaba’s valuation ranks as a key factor behind Wall Street’s favor. The stock trades below nine times forward earnings. Its price-to-earnings-to-growth (PEG) ratio of 0.57 based on five-year earnings growth projections is exceptionally attractive.
Many analysts seem to anticipate that Alibaba will be able to deliver stronger growth in the future. The company has expanded payment and logistics services on its popular Taobao and Tmall e-commerce platforms. Its cloud unit continues to deliver solid sales growth with a significant tailwind from AI.
I generally agree with Wall Street’s upbeat view of Alibaba. But will its shares soar 40% over the next 12 months? I’m hesitant to go that far. I’d prefer to see evidence of the company’s accelerating growth before becoming a full-blown cheerleader for this AI stock.
2. ASML Holding NV
ASML Holding NV‘s (ASML -0.51%) share price could vault 24% higher over the next 12 months if the consensus opinion on Wall Street is right. Sure, a handful of analysts aren’t as positive about the semiconductor fabrication equipment company. One of the 39 analysts surveyed by LSEG in January had an “underperform” rating for ASML, while nine recommended holding the stock. However, the other 29 analysts rated it as a “buy” or a “strong buy.”
Unlike Alibaba, ASML doesn’t win Wall Street’s support because of its compelling valuation. The stock trades at a forward earnings multiple of 30 and has a PEG ratio of 1.96. Those metrics reflect that ASML is priced at a premium.
Why do many analysts think the stock deserves its premium price tag? For one thing, ASML commands a market share of around 90% in supplying photolithography equipment used to make semiconductors. The continued surging demand for AI chips is another important factor behind Wall Street’s optimism about this stock.
I’m on the same page as most analysts with this AI stock. My hunch is that ASML will reward investors’ confidence with its fourth-quarter update on Wednesday of this week. A 24% gain over the next 12 months doesn’t seem unreasonable to me.
3. Salesforce
Salesforce (CRM 3.71%) edges out Nvidia by a hair for the third spot among mega-cap AI stocks Wall Street thinks will soar the most over the next 12 months. And the two stocks could easily swap places with slight moves by either. The average price target for Salesforce reflects an upside potential of a little over 17% — a fraction of a percentage greater than the potential estimated gain for Nvidia.
Why do analysts like Salesforce? It’s probably not because of the customer relationship management (CRM) systems leader’s current sales growth. Salesforce’s revenue rose only 8% year over year in the third quarter of fiscal 2025, which ended Oct. 31, 2024. However, the company’s earnings jumped roughly 25% higher.
Arguably the main reason for Wall Street’s bullish take on Salesforce, though, is the potential for the company’s Agentforce platform that uses AI agents. Increasing customer interest in Agentforce was a key factor behind TD Cowen’s recent upgrade of the stock, according to media reports.
I won’t be surprised if Salesforce hits Wall Street’s consensus price target over the next 12 months. The newest version of Agentforce introduced last month could be just the spark this stock needs to extend its rebound after a moderate pullback.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Nvidia, and Salesforce. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
Artificial intelligence (AI) has been one of the most exciting and transformative technologies of the 21st century. As AI continues to revolutionize industries and improve efficiency, investors are keeping a close eye on the stocks of companies at the forefront of this innovative technology.
Wall Street analysts have been closely monitoring the potential of mega-cap AI stocks, and have identified three companies that they believe will experience significant growth over the next 12 months. These companies are considered leaders in the AI space and are expected to soar to new heights as the demand for AI solutions continues to rise.
1. Alphabet Inc. (GOOGL)
Alphabet, the parent company of Google, is a global leader in AI technology. With its vast resources and cutting-edge research, Alphabet has been at the forefront of developing AI-powered products and services. Wall Street analysts are bullish on Alphabet’s AI capabilities and believe that the company will continue to dominate the AI market in the coming years.
2. Microsoft Corporation (MSFT)
Microsoft has been investing heavily in AI research and development, and its efforts have paid off. The company’s AI-powered products, such as Azure AI and Cortana, have been well-received by consumers and businesses alike. Wall Street analysts see Microsoft as a strong player in the AI space and expect the company to experience significant growth in the next 12 months.
3. Amazon.com Inc. (AMZN)
Amazon has been leveraging AI technology to enhance its e-commerce platform and improve its customer experience. The company’s AI-powered products, such as Alexa and Amazon Go, have been widely adopted and have contributed to Amazon’s success. Wall Street analysts believe that Amazon’s AI initiatives will continue to drive growth and profitability in the coming months.
Overall, these mega-cap AI stocks are expected to soar over the next 12 months as they continue to innovate and capitalize on the growing demand for AI solutions. Investors looking to capitalize on the potential of AI technology should consider adding these stocks to their portfolios.
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