We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reasons to Buy These 2 AI Stocks Offering Triple-Digit Returns in 2025
Read MoreHide Full Article
Key Takeaways
APLD and LITE have both delivered more than 200% returns in 2025 on surging AI infrastructure demand.
APLD's long-term prospects ride on accelerating spending on AI infrastructure by hyperscalers.
LITE is developing and providing photonic solutions for AI applications, particularly for data centers.
The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to unfold fully. Solid demand from AI infrastructure end markets such as hyperscale automation, robotics, healthcare, energy, materials, financials and cybersecurity will dramatically change this space over the next five years.
Here, we recommend two AI infrastructure developers that have skyrocketed in 2025 with more than 200% returns. Yet their diversified products for AI infrastructure and strong demand will ensure growth in the future.
The chart below shows the price performance of our two picks year to date.
Image Source: Zacks Investment Research
Applied Digital Corp.
Zacks Rank #2 Applied Digital is a U.S. designer, developer, and operator of high-performance data centers for AI and blockchain workloads. APLD’s long-term prospects ride on accelerating spending on AI infrastructure by hyperscalers. The global AI market is expected to hit $500 billion by 2027. AI needs data centers with high power density, as well as changing power and cooling requirements. Hyperscalers require high-capacity data centers to meet the escalating power needs of AI and GPU-driven applications. These factors bode well for APLD’s prospects.
Innovative Product Portfolio
APLD’s HPC pivot is anchored by multi-year leases at its Ellendale campus (Polaris Forge 1), which expanded from 250 MW in May 2025 to a fully leased 400 MW by August 2025 with a single hyperscaler tenant, CoreWeave Inc. (CRWV - Free Report) . Management cites approximately $11 billion of anticipated contracted lease revenue across roughly 15 years.
APLD targets 12-14 month build timelines, shortened from approximately 24 months previously, and is scaling to develop multiple campuses in parallel, with 700 MW under construction. Design features include direct-to-chip liquid cooling with a design PUE target of 1.18 and near-zero water use, leveraging over 200 days of natural cooling in the Dakotas.
These capabilities, cited across 2025 and the first quarter of fiscal 2026, differentiate Applied Digital as data center power constraints tighten and hyperscaler demand accelerates. A proven design-and-deliver model, evidenced by recent fit-out activity and full campus leasing, increases the likelihood of repeat wins and schedule adherence as projects ramp.
While the strategic focus is HPC, the Data Center Hosting business remains fully contracted at approximately 286 MW across two North Dakota sites and is operated at full capacity as of Aug. 31, 2025. The legacy hosting base offers operational continuity and cash generation support that can complement the staged conversion toward long-duration, hyperscaler-backed data center rental economics.
Strong Estimate Revisions
Applied Digital has an expected revenue and earnings growth rate of 30.4% and 61.3%, respectively, for the current year (ending May 2026). The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the last 60 days.
APLD has an expected revenue and earnings growth rate of 92.7% and more than 100%, respectively, for next year (ending May 2027). The Zacks Consensus Estimate for next year’s earnings has improved 25% over the last 60 days.
Image Source: Zacks Investment Research
Lumentum Holdings Inc.
Zacks Rank #1 Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of artificial intelligence, cloud computing, 5G connectivity, and beyond.
Solid Product Portfolio
LITE’s industrial lasers are used in precision manufacturing, such as cutting semiconductors and solar cells. LITE also develops 3D sensing laser diodes for applications like facial recognition in smartphones and autonomous vehicle sensors.
Shares of Lumentum have gathered momentum in the past three months boosted by growing AI demand. LITE is developing and providing photonic solutions for AI applications, particularly for data centers. LITE’s major AI-enabled offerings are high-speed transceivers, optical circuit switches, and lasers that enable faster, more efficient, and scalable AI infrastructure.
Moreover, LITE has a strong collaboration with NVIDIA Corp. (NVDA - Free Report) in developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.
Strong Estimate Revisions
Lumentum Holdings has an expected revenue and earnings growth rate of 56% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 60 days.
LITE has an expected revenue and earnings growth rate of 31.4% and 41.9%, respectively, for next year (ending June 2027). The Zacks Consensus Estimate for next year’s earnings has improved 13.1% over the last 60 days.
Image Source: Zacks Investment Research
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Reasons to Buy These 2 AI Stocks Offering Triple-Digit Returns in 2025
Key Takeaways
The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to unfold fully. Solid demand from AI infrastructure end markets such as hyperscale automation, robotics, healthcare, energy, materials, financials and cybersecurity will dramatically change this space over the next five years.
Here, we recommend two AI infrastructure developers that have skyrocketed in 2025 with more than 200% returns. Yet their diversified products for AI infrastructure and strong demand will ensure growth in the future.
These two stocks are: Applied Digital Corp. (APLD - Free Report) and Lumentum Holdings Inc. (LITE - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our two picks year to date.
Image Source: Zacks Investment Research
Applied Digital Corp.
Zacks Rank #2 Applied Digital is a U.S. designer, developer, and operator of high-performance data centers for AI and blockchain workloads. APLD’s long-term prospects ride on accelerating spending on AI infrastructure by hyperscalers. The global AI market is expected to hit $500 billion by 2027.
AI needs data centers with high power density, as well as changing power and cooling requirements. Hyperscalers require high-capacity data centers to meet the escalating power needs of AI and GPU-driven applications. These factors bode well for APLD’s prospects.
Innovative Product Portfolio
APLD’s HPC pivot is anchored by multi-year leases at its Ellendale campus (Polaris Forge 1), which expanded from 250 MW in May 2025 to a fully leased 400 MW by August 2025 with a single hyperscaler tenant, CoreWeave Inc. (CRWV - Free Report) . Management cites approximately $11 billion of anticipated contracted lease revenue across roughly 15 years.
APLD targets 12-14 month build timelines, shortened from approximately 24 months previously, and is scaling to develop multiple campuses in parallel, with 700 MW under construction. Design features include direct-to-chip liquid cooling with a design PUE target of 1.18 and near-zero water use, leveraging over 200 days of natural cooling in the Dakotas.
These capabilities, cited across 2025 and the first quarter of fiscal 2026, differentiate Applied Digital as data center power constraints tighten and hyperscaler demand accelerates. A proven design-and-deliver model, evidenced by recent fit-out activity and full campus leasing, increases the likelihood of repeat wins and schedule adherence as projects ramp.
While the strategic focus is HPC, the Data Center Hosting business remains fully contracted at approximately 286 MW across two North Dakota sites and is operated at full capacity as of Aug. 31, 2025. The legacy hosting base offers operational continuity and cash generation support that can complement the staged conversion toward long-duration, hyperscaler-backed data center rental economics.
Strong Estimate Revisions
Applied Digital has an expected revenue and earnings growth rate of 30.4% and 61.3%, respectively, for the current year (ending May 2026). The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the last 60 days.
APLD has an expected revenue and earnings growth rate of 92.7% and more than 100%, respectively, for next year (ending May 2027). The Zacks Consensus Estimate for next year’s earnings has improved 25% over the last 60 days.
Image Source: Zacks Investment Research
Lumentum Holdings Inc.
Zacks Rank #1 Lumentum Holdings designs and manufactures optical and photonic technologies for high-speed telecommunications, data centers, and advanced manufacturing. LITE provides components, such as transceivers and lasers for fiber-optic networks, supporting the rapid growth of artificial intelligence, cloud computing, 5G connectivity, and beyond.
Solid Product Portfolio
LITE’s industrial lasers are used in precision manufacturing, such as cutting semiconductors and solar cells. LITE also develops 3D sensing laser diodes for applications like facial recognition in smartphones and autonomous vehicle sensors.
Shares of Lumentum have gathered momentum in the past three months boosted by growing AI demand. LITE is developing and providing photonic solutions for AI applications, particularly for data centers. LITE’s major AI-enabled offerings are high-speed transceivers, optical circuit switches, and lasers that enable faster, more efficient, and scalable AI infrastructure.
Moreover, LITE has a strong collaboration with NVIDIA Corp. (NVDA - Free Report) in developing NVDA’s silicon photonics ecosystem, especially for deploying the latter’s Spectrum-X Photonics networking switches.
Strong Estimate Revisions
Lumentum Holdings has an expected revenue and earnings growth rate of 56% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 60 days.
LITE has an expected revenue and earnings growth rate of 31.4% and 41.9%, respectively, for next year (ending June 2027). The Zacks Consensus Estimate for next year’s earnings has improved 13.1% over the last 60 days.
Image Source: Zacks Investment Research