Forget NVIDIA: 2 AI Stocks Poised to Be Next Big Winners

NVIDIA Corporation’s NVDA state-of-the-art Blackwell chips and graphics processing units (GPUs) have seen incessant demand. Despite robust product interest, NVIDIA’s shares have struggled to gain ground this year, weighed down by concerns about a slowdown in spending on artificial intelligence (AI) infrastructure and relentless geopolitical tensions.

NVIDIA’s shares have declined 4.8% year to date, while Micron Technology, Inc. MU, which supplies DRAM and NAND memory critical for AI data centers, along with Applied Materials, Inc. AMAT, a key “pick-and-shovel” AI supplier, have climbed 28.3% and 35.6%, respectively. Both are well-positioned to build on this momentum and emerge as the next big winners. Here’s why –

HBM Demand Drives Micron With Upside of Up to 105%

Micron’s high-bandwidth memory (HBM) chips are witnessing strong demand due to their capability to handle huge workloads while improving power efficiency. As data center operators and hyperscalers continue to expand AI infrastructure, demand for HBM chips remains strong despite supply constraints. In reality, the demand-supply imbalance in HBM chips is expected to push prices higher, positioning Micron for growth over time.

Consequently, Micron expects revenues of $33.5 billion for the third-quarter fiscal 2026, up from $23.86 billion in the second quarter of fiscal 2026, according to investors.micron.com. Micron is projecting an exceptionally high gross margin of 81% for the third-quarter fiscal 2026, highlighting strong financial momentum and pricing power. As a result, the company’s expected earnings growth rate for the current year is a whopping 603.9%.

Brokers are also bullish on Micron’s growth prospects. They estimate an average short-term price target for MU stock at $492.58, a 34.5% increase from the last closing price of $366.24. The highest target is $750, suggesting a potential upside of 104.8%.

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AI Chip Demand Drives Applied Materials With 43.5% Upside

Continuous rise in AI investments is boosting sales of Applied Materials’ cutting-edge semiconductor equipment. Applied Materials’ CEO stated that the company is dominating the market in high-performance, energy-efficient chip manufacturing equipment and is aiming for growth of over 20% this year. AI demand across logic, HBM, and advanced packaging has diversified Applied Materials’ revenues and helped mitigate China-related risks.

Applied Materials projects revenues of $7.65 billion for the second quarter of fiscal 2026, plus or minus $500 million, according to ir.appliedmaterials.com. This follows revenues of $7.01 billion for the first quarter of fiscal 2026, highlighting sustained growth momentum. The company stayed profitable, registering a non-GAAP gross margin of 49.1% in the fiscal first quarter and $1.69 billion in operating cash to support growth initiatives.

As a result, the company’s projected earnings growth rate for the current year is a solid 17.8%. Brokers, too, are optimistic about Applied Materials’ growth prospects. They forecast the average short-term price target for AMAT stock at $402.41, reflecting a 15.5% increase from the last closing price of $348.47. The highest target is $500, suggesting a potential upside of 43.5%.

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While Micron flaunts a Zacks Rank #1 (Strong Buy), Applied Materials possesses a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

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