Title: Unlocking Potential: Two AI Stocks Set to Soar
In 2025, AI technology investments are projected to surge, with IDC estimating a staggering $227 billion in spending. This figure includes data center infrastructure, AI agents, and organizations' efforts to incorporate AI capabilities into their operations. Notably, 67% of this total, amounting to $148 billion, is earmarked for businesses integrating AI into their operations. This scenario sets the stage for substantial growth for both AI hardware and software companies, making it an opportune moment to scrutinize promising AI contenders.
Two companies distinctly positioned to capitalize on this AI spending frenzy are Micron Technology (MU -0.07%) and Snowflake (SNOW 0.89%). Both have exhibited substantial share price increases, with Micron rising 20% in 2025 and Snowflake experiencing a notable surge in recent months.
1. Micron Technology
The memory market is primed for expansion in 2025 due to the AI trend. Market research firm Gartner anticipates a 28% increase in DRAM sales this year, driven by unprecedented demand for high-bandwidth memory (HBM) for AI accelerators. Micron, having already captured a lead in this market with its HBM chips selected for use in Nvidia's gaming and AI workload graphics cards, is positioned to prosper.
Nvidia's next-generation GPUs and Grace CPUs also utilize Micron's HBM, further bolstering Micron's prominence in the HBM market. Samsung, Micron's largest rival, struggles to compete here, paving the way for Micron to establish a more prominent role. With an estimated HBM market growth from $16 billion in 2024 to over $100 billion by 2030, and a remarkable growth spurt in its fiscal 2025, Micron appears poised for significant upward momentum.
Micron's first-quarter fiscal 2025 revenue leaped by 84% year over year to $8.7 billion, while its adjusted profit soared from a loss of $0.95 per share to $1.79 per share. Analysts predict a 39% revenue increase to $35 billion for the current fiscal year and an additional 28% growth in fiscal 2026 to just under $45 billion. Earnings are projected to surge to $8.90 per share in fiscal 2025, followed by a 44% increase in fiscal 2026 to $12.83 per share.
Given its strong earnings growth projections and an attractive forward earnings multiple of 26 (as compared to its current 13.6x), Micron presents an enticing opportunity for tech-focused investors.
2. Snowflake
Since its third-quarter fiscal 2025 earnings report in November, Snowflake's stock price has surged by more than 23%. Its revenue increased by 28% to $942 million, with product revenue forecast to reach $3.43 billion in fiscal 2025. Snowflake's focus on consolidating, securing, and deriving insights from data positions it for continued success in the AI trend.
Moreover, Snowflake's AI and machine-learning features are already gaining traction, enabling employees to perform tasks such as writing code and extracting data from documents. With its established customer base of over 10,600, Snowflake has a significant opportunity to expand its AI-focused offerings.
Snowflake boasts an impressive 127% net revenue retention rate, indicating that its existing customers are increasing their spending on its offerings. The company's remaining performance obligations also experienced a 55% increase to $5.7 billion in its last reported quarter, suggesting a promising future.
As a result, Snowflake is likely to maintain its growth momentum in both the short and long term, supported by its solid earnings growth projections.
- Investors interested in AI finance might consider Micron Technology, given its leadership in the high-bandwidth memory (HBM) market for AI accelerators, expected to grow from $16 billion in 2024 to over $100 billion by 2030.
- Snowflake's strong performance in its third-quarter fiscal 2025 earnings report, coupled with its focus on AI and machine learning, positions it well for continued success and investment opportunities in the AI trend.
