2 Large-Cap AI Stocks Already Up 300%+ That Could Still Soar Higher

The rapid growth of artificial intelligence (AI) has driven significant gains for Palantir Technologies Inc. PLTR and Micron Technology, Inc. MU, turning them into two of the most highly sought-after stocks on Wall Street. Over the past two years, Palantir and Micron’s shares have soared 517.1% and 311.7%, respectively. Let’s take a closer look at their recent developments and the reasons why their rally is far from over.

Palantir Sees Strong Growth Driven by AI Platform

Several U.S. commercial organizations and government agencies adopted Palantir’s Artificial Intelligence Platform (AIP). The AIP has gained strong popularity because it enables organizations to seamlessly integrate AI and large language models into highly complex data environments.

Due to the strong demand for AIP, Palantir’s revenues for the fourth quarter of 2025 came in at $1.4 billion, up 70% year over year and 19% quarter over quarter, according to investors.palantir.com. Revenues from the U.S. commercial client segment jumped 137% year over year and 28% sequentially to $507 million. Government segment revenue increased 66% year over year and 17% quarter over quarter to $570 million.

Palantir expects its GAAP net income to continue improving during the current year. The company already reported $609 million in GAAP net income for the fourth quarter of 2025, representing a 43% profit margin. The company also projects total revenues to increase to $7.182-$7.198 billion in 2026 from $4.475 billion in the previous year.

Palantir’s Gotham and Foundry platforms face limited competition, which could support predictable cash flows in the future. Palantir already generated $791 million in adjusted free cash flow in the fourth quarter of 2025, representing a free cash flow margin of 56%.

Therefore, Palantir is experiencing strong growth, largely driven by its AIP, supported by rising revenues, high margins and robust free cash flows. As a result, the company’s projected earnings growth rate for the current year is 74.7%, while the Zacks Consensus Estimate of $1.31 in earnings per share (EPS) suggests 87.1% year-over-year growth.

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MU Sees Strong Growth Driven by Cloud Memory and HBM Demand

Micron reported $13.64 billion in revenue for the first quarter of fiscal 2026, up 56% year over year, which exceeded Wall Street’s projection of $12.88 billion, according to investors.micron.com. Its cloud memory segment drove growth with $5.28 billion in sales, up a whopping 99.5% year over year. The strong top-line performance helped Micron achieve a non-GAAP net income of $5.48 billion, surpassing analysts’ estimates.

Strong demand for Micron’s high-bandwidth memory (HBM) chips boosted its quarterly performance. This is because the HBM chips are gaining recognition for their ability to manage high volumes of workloads while enhancing power performance.

Currently, demand for HBM chips shows no signs of easing amid supply constraints. This imbalance between demand and supply is expected to strengthen Micron’s pricing power, improve profit margins and potentially drive the stock price higher. Sanjay Mehrotra, CEO of Micron, also noted that tight HBM supply amid strong demand is likely to continue, supporting higher prices and benefiting the company.

Management expects Micron’s net income to grow, and forecasts fiscal second-quarter 2026 revenue of $18.3-$19.1 billion. Its expected earnings growth rate for the current year is 323.4%, while the Zacks Consensus Estimate of $35.12 in EPS indicates 224.9% year-over-year growth.

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Presently, Micron sports a Zacks Rank #1 (Strong Buy), while Palantir has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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