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2 AI Stocks Outpacing NVIDIA in 2025 With Bigger Gains Ahead
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Key Takeaways
Micron benefited from soaring HBM demand, posting 56.8% revenue growth and strong guidance for fiscal Q2 2026.
MU saw cloud memory sales jump 99.5% year over year, lifting earnings and cash flow to fund future growth.
Palantir gained momentum as AIP adoption drove sharp growth in U.S. commercial and government revenues.
Banking on the rise in demand for artificial intelligence (AI)-powered solutions in 2025, Wall Street’s darling, NVIDIA Corporation’s (NVDA - Free Report) shares have gained 40% this year. Incessant demand for its Blackwell chips and CUDA software platform has fueled NVIDIA’s growth.
However, riding the AI boom, Micron Technology, Inc. (MU - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) have significantly outperformed NVIDIA, whose shares have soared 251.2% and 143.1%, respectively, this year. These stocks remain well-positioned for further gains ahead, making them compelling investment options. Let’s explore why they are gaining momentum –
Micron Soars on HBM Demand and AI-Driven Growth
The rise in demand for Micron’s high-bandwidth memory (HBM) chips has been a hidden tailwind in 2025, boosting its latest quarterly performance. HBM chips are in demand due to their ability to curb power consumption and process large volumes of data.
For fiscal first-quarter 2026, Micron posted revenues of $13.64 billion, up 56.8% year over year, according toinvestors.micron.com. Micron’s sales surpassed analysts’ estimates of around $12.88 billion.
Micron’s all business units reported an increase in sales, with its primary cloud memory business segment reporting a year-over-year sales increase of 99.5% to $5.28 billion. Additionally, Micron’s non-GAAP net income reached $5.48 billion, or $4.78 per diluted share, more than analysts’ projection of $3.94.
While Micron’s CEO, Sanjay Mehrotra, believes that “the growth in AI data center capacity is driving a significant increase in demand for high-performance and high-capacity memory and storage,” management expects fiscal second-quarter 2026 revenues to come in between $18.3 billion and $19.1 billion. If Micron achieves this level of revenue growth, it would nearly match what the company achieved during the dot-com bubble.
Micron also forecasted diluted earnings per share (EPS) of $8.22 to $8.62 for the fiscal second quarter of 2026, and with $3.9 billion in cash flow generated in fiscal first-quarter 2026, the company has sufficient resources to fund additional growth initiatives.
Meanwhile, the HBM market is expected to grow in the future, which bodes well for Micron. The HBM market is valued at $1,516.31 million in 2026, and is expected to see a CAGR of 25.5% to $7,721.41 million by 2035, according to Market Growth Reports. Therefore, Micron’s projected earnings growth rate for next year is 26.2%. The company’s $31.36 Zacks Consensus Estimate for EPS is up 185.9% year over year.
Image Source: Zacks Investment Research
Palantir Gains as AIP Fuels U.S. Commercial and Government Growth
Palantir’s Artificial Intelligence Platform (AIP) is in demand among both U.S. commercial and government clients. This is because AIP can seamlessly integrate AI with real-world complex data and workflow, which helps in faster decision-making.
As a result, Palantir has performed well this year, with revenues for the third quarter coming in at $1.18 billion, up 63% from the same period a year ago and 18% sequentially, as mentioned on investors.palantir.com.
Government segment revenues were $486 million, marking a 52% year-over-year increase and a 14% rise sequentially. Most importantly, revenues from the U.S. commercial client segment soared 121% year over year and 29% quarter over quarter to $397 million.
What’s more, Palantir expects its fourth-quarter revenues to come in between $1.327 billion and $1.331 billion, and full-year sales to be even better at $4.396 billion to $4.400 billion, and expects to post positive GAAP net income throughout the year.
An expanding commercial client base in the United States will drive Palantir’s future growth, and rising government contracts will create hurdles for new entrants. Thus, the company’s expected earnings growth rate for next year is 42.5%. Palantir’s $0.73 Zacks Consensus Estimate for EPS is up 52.1% year over year.
Image: Bigstock
2 AI Stocks Outpacing NVIDIA in 2025 With Bigger Gains Ahead
Key Takeaways
Banking on the rise in demand for artificial intelligence (AI)-powered solutions in 2025, Wall Street’s darling, NVIDIA Corporation’s (NVDA - Free Report) shares have gained 40% this year. Incessant demand for its Blackwell chips and CUDA software platform has fueled NVIDIA’s growth.
However, riding the AI boom, Micron Technology, Inc. (MU - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) have significantly outperformed NVIDIA, whose shares have soared 251.2% and 143.1%, respectively, this year. These stocks remain well-positioned for further gains ahead, making them compelling investment options. Let’s explore why they are gaining momentum –
Micron Soars on HBM Demand and AI-Driven Growth
The rise in demand for Micron’s high-bandwidth memory (HBM) chips has been a hidden tailwind in 2025, boosting its latest quarterly performance. HBM chips are in demand due to their ability to curb power consumption and process large volumes of data.
For fiscal first-quarter 2026, Micron posted revenues of $13.64 billion, up 56.8% year over year, according to investors.micron.com. Micron’s sales surpassed analysts’ estimates of around $12.88 billion.
Micron’s all business units reported an increase in sales, with its primary cloud memory business segment reporting a year-over-year sales increase of 99.5% to $5.28 billion. Additionally, Micron’s non-GAAP net income reached $5.48 billion, or $4.78 per diluted share, more than analysts’ projection of $3.94.
While Micron’s CEO, Sanjay Mehrotra, believes that “the growth in AI data center capacity is driving a significant increase in demand for high-performance and high-capacity memory and storage,” management expects fiscal second-quarter 2026 revenues to come in between $18.3 billion and $19.1 billion. If Micron achieves this level of revenue growth, it would nearly match what the company achieved during the dot-com bubble.
Micron also forecasted diluted earnings per share (EPS) of $8.22 to $8.62 for the fiscal second quarter of 2026, and with $3.9 billion in cash flow generated in fiscal first-quarter 2026, the company has sufficient resources to fund additional growth initiatives.
Meanwhile, the HBM market is expected to grow in the future, which bodes well for Micron. The HBM market is valued at $1,516.31 million in 2026, and is expected to see a CAGR of 25.5% to $7,721.41 million by 2035, according to Market Growth Reports. Therefore, Micron’s projected earnings growth rate for next year is 26.2%. The company’s $31.36 Zacks Consensus Estimate for EPS is up 185.9% year over year.
Image Source: Zacks Investment Research
Palantir Gains as AIP Fuels U.S. Commercial and Government Growth
Palantir’s Artificial Intelligence Platform (AIP) is in demand among both U.S. commercial and government clients. This is because AIP can seamlessly integrate AI with real-world complex data and workflow, which helps in faster decision-making.
As a result, Palantir has performed well this year, with revenues for the third quarter coming in at $1.18 billion, up 63% from the same period a year ago and 18% sequentially, as mentioned on investors.palantir.com.
Government segment revenues were $486 million, marking a 52% year-over-year increase and a 14% rise sequentially. Most importantly, revenues from the U.S. commercial client segment soared 121% year over year and 29% quarter over quarter to $397 million.
What’s more, Palantir expects its fourth-quarter revenues to come in between $1.327 billion and $1.331 billion, and full-year sales to be even better at $4.396 billion to $4.400 billion, and expects to post positive GAAP net income throughout the year.
An expanding commercial client base in the United States will drive Palantir’s future growth, and rising government contracts will create hurdles for new entrants. Thus, the company’s expected earnings growth rate for next year is 42.5%. Palantir’s $0.73 Zacks Consensus Estimate for EPS is up 52.1% year over year.
Image Source: Zacks Investment Research
While Micron has a Zacks Rank #1 (Strong Buy), Palantir has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.