The adoption of synthetic intelligence (AI) know-how is ready to proceed at a speedy tempo in 2025: Market analysis agency IDC estimates that investments in knowledge middle infrastructure, AI brokers, and efforts taken by organizations to embed AI capabilities into their operations will add as much as outlays of $227 billion this yr.
What’s value noting right here is that IDC expects 67% of that complete to go towards companies’ efforts to combine AI into their operations. So 2025 could possibly be a yr of strong development for each AI {hardware} and software program corporations. That is why now could be a great time to take a more in-depth take a look at two AI corporations that might win huge from the large spending on AI infrastructure and options, and doubtlessly see parabolic will increase of their share costs.
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A parabolic transfer refers to a pointy enhance within the inventory worth of an organization in a brief interval, tracing a path that resembles one aspect of a parabolic curve. Micron Expertise (NASDAQ: MU) appears to be on that path — its inventory worth has risen 20% in 2025 already. Snowflake (NYSE: SNOW), too, has skilled a pointy leap in its inventory worth in latest months, and will very nicely preserve its momentum.
1. Micron Expertise
The reminiscence market is predicted to take pleasure in one other yr of strong development in 2025 because of the AI development. Market analysis agency Gartner estimates that unprecedented demand for high-bandwidth reminiscence (HBM), which is utilized in AI accelerators to allow quicker knowledge transmission speeds and impart extra computing energy, together with will increase in costs, might increase dynamic random entry reminiscence (DRAM) gross sales this yr by 28% to $115.6 billion.
Micron is already benefiting from the AI-driven alternative in its core market. The reminiscence specialist obtained a leap on bigger rival Samsung, because it was Micron’s HBM chips that had been selected for use in Nvidia‘s graphics playing cards for each gaming and AI workloads. Extra particularly, Nvidia’s upcoming GeForce RTX 50 collection gaming graphics playing cards will use Micron’s HBM.
In the meantime, Micron administration introduced on the corporate’s Decemberearnings convention callthat Nvidia’s Grace server CPU (central processing unit) can be utilizing its HBM. In the meantime, Nvidia picked Micron’s quickest HBM chip to be used in its next-generation Blackwell AI techniques. Samsung, then again, has reportedly struggled to get its chips certified at Nvidia, paving the best way for Micron to maintain benefiting from the HBM market’s potential.
That bodes nicely for Micron, which forecasts that the scale of the HBM market will develop from $16 billion in 2024 to greater than $100 billion by 2030. On the similar time, buyers ought to observe that Micron’s development is ready to select up remarkably in its fiscal 2025 (which started Aug. 30). Income within the first quarter of the fiscal yr elevated by a formidable 84% yr over yr to $8.7 billion.
It additionally reported an adjusted revenue of $1.79 per share as in comparison with a lack of $0.95 per share within the prior-year interval. Analysts count on a 39% enhance in Micron’s income within the present fiscal yr to $35 billion, adopted by one other strong leap of 28% in fiscal 2026 to simply beneath $45 billion. Moreover, Micron’s earnings are anticipated to leap to $8.90 per share in fiscal 2025 from simply $1.30 per share in fiscal 2024, adopted by a 44% enhance in fiscal 2026 to $12.83 per share.
Primarily based on these earnings estimates, Micron’s inventory worth might take off huge time if it begins buying and selling in step with the Nasdaq-100 index’s common forward earnings multiple of 26 (utilizing the index as a proxy for tech shares). Proper now, Micron trades at simply 13.6 occasions ahead earnings. Traders, subsequently, can get a terrific deal on this AI stock. Contemplate grabbing this chance earlier than Micron soars larger.
2. Snowflake
Snowflake (NYSE: SNOW) noticed spectacular share worth momentum because it launched the outcomes for its fiscal 2025 third quarter in November. Share costs jumped greater than 23% since its quarterly report was launched.
The corporate gives a knowledge cloud platform that permits prospects to securely consolidate knowledge, which they will use to derive enterprise insights and construct purposes. It additionally permits purchasers to share their knowledge. For the interval that ended Oct. 31, its income shot up by 28% yr over yr to $942 million. Extra importantly, Snowflake raised its steering. It now expects its product income to rise by 29% to $3.43 billion in fiscal 2025.
Nonetheless, do not be shocked if Snowflake clocks even stronger development within the new fiscal yr (starting subsequent month). The corporate is seeing “vital adoption” of its AI-centric merchandise, as administration identified on the final earnings conference call. Administration says greater than 3,200 prospects now use its AI and machine-learning options, which assist workers perform tasks akin to writing code and extracting knowledge from paperwork. On condition that Snowflake completed its final reported quarter with simply over 10,600 prospects, it nonetheless has a big alternative to cross-sell its AI-focused choices into its established person base.
Snowflake ought to have the ability to win an even bigger share of its purchasers’ wallets from right here — a sample it has already established. In its newest reported quarter, its internet income retention fee stood at a formidable 127%. Which means that, on common, Snowflake’s present prospects spent 27% extra on its choices than they did within the year-ago interval.
The stronger spending by present prospects, in addition to a 20% year-over-year enhance in its total buyer base, explains why Snowflake’s remaining efficiency obligations jumped by a formidable 55% to $5.7 billion. An organization’s remaining efficiency obligations are the full worth of its unfulfilled contracts, so the truth that this metric grew quicker than income final quarter means that Snowflake’s future could possibly be even brighter.
Furthermore, analysts’ consensus estimates are for a 42% leap in Snowflake’s earnings in fiscal 2026 to $0.99 per share, and that is anticipated to be adopted by even higher development within the following yr.
Information by YCharts.
As such, Snowflake is more likely to stay a prime growth stock in the long term, and its accelerating earnings development ought to assist it maintain its latest momentum.
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Harsh Chauhan has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Nvidia and Snowflake. The Motley Idiot recommends Gartner. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
