Speaking on a Schwab Network show last week, presenter Alex Coffee mentioned an interesting fact. He pointed out that this year’s second quarter was one of the best ever and historically, 94% of the time the S&P 500 has delivered higher returns for the full year in comparison to the second quarter. With Q2 S&P 500 return of roughly 15%, he sees this as a signal of strength and an opportunity to keep buying, and he’s not the only one.
Tom Lee, managing partner at Fundstrat, is bullish for the month of July and sees significant upside in stocks going forward.
In July, we’re gonna get Q2 earnings and in the first quarter, earnings came in way better than expected, so the market’s PE is actually lower than it was in January. I think second quarter earnings are going to surprise to the upside again, so the market is going to be cheaper again. That means there’s room for PE to expand, so i think July is going be a stronger month for stocks.
Asked if the S&P could reach 8000 this year, he said yes, as that would represent a 20-times multiple of 2027 earnings. He believes 8000 is a low estimate and the S&P could well hit 8400 or 8800 by year-end.
He is clearly bullish on the market, but the hard part is determining which stocks are best placed to drive those returns. One way to figure that out is to look at Wall Street consensus and see which stocks the Street thinks will dominate going forward. After compiling the required data, we came up with the 10 Best AI Stocks to Watch in July.
Our Methodology
To compile our list of the 10 best AI stocks to watch in July, we first reviewed various AI-themed ETFs and financial media to identify companies developing AI technologies as well as those benefiting from the rapid expansion of AI infrastructure and adoption. We then shortlisted stocks with a market cap of at least $2 billion. These stocks have a consensus upside potential of at least 25%, making them a suitable bet for outperformance over the next 12 months. They have also reported recent investor-worthy news and are ranked in ascending order of their potential upside.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Note: All share price data is as of July 7, 2026.
10. AppLovin Corporation (NASDAQ:APP)
Potential Upside: 26%
Based on a report released on July 1, Clark Lampen, an analyst at BTIG, reaffirmed a Buy rating on AppLovin Corporation (NASDAQ:APP) along with a price target of $640. The firm’s assigned price target reflects a further 17% upside from current levels. This upside is close to the median Wall Street analysts’ upside estimate of 22%, based on 37 analysts covering the stock.
The next important catalyst for AppLovin Corporation (NASDAQ:APP) is its second-quarter fiscal year 2026 earnings, scheduled to be reported on August 5 after the U.S. market closes. As per the company’s previously provided outlook, revenue for the quarter is expected to range from $1.815 billion to $1.945 billion. Adjusted EBITDA is forecasted to be between $1.615 billion and $1.645 billion. This represents an adjusted EBITDA margin of 84%-85%. In addition, the company expects a temporary increase in sales and marketing expenses as it supports the launch of the self-serve platform. Given that the stock responded well to the previous earnings and the expanded adoption of AXON 2.0, investors will expect similar performance this time as well, making the stock worth buying as an AI pick for the month of July.
AppLovin Corporation (NASDAQ:APP) is a technology company that provides AI-powered software solutions designed to help businesses, primarily mobile app developers, grow by acquiring users and monetizing their apps.
9. Nebius Group NV (NASDAQ:NBIS)
Potential Upside: 35.7%
On July 2, Nebius Group NV (NASDAQ:NBIS) received some analyst attention on Wall Street as a result of Meta’s entry into the cloud computing business. Stefan Slowinski of BNP Paribas has a Neutral rating on the stock, partly because Nebius’ stock has already risen over 345% this year so far. While he thinks the stock has run its course, the company’s business is expected to stay strong. He believes the company’s pricing power will remain intact and cited SpaceX’s recent deals with Google and Anthropic as evidence that the demand for compute continues to stay strong. In his note to investors, Slowinski said:
Near term, we continue to find the pricing environment supportive, evidenced in part by SpaceX’s recent AI infrastructure deals with Anthropic and Google.
On the subject of strong demand, the analyst also pointed out that Amazon’s recent 20% price increase for GPU reservation service would benefit NeoClouds like Nebius. Enterprises continue to look for cheaper alternatives, and Nebius provides exactly that through its open-source models. This factor, he believes, could be the catalyst for NBIS’ next rally, if that materializes:
In this regard, Nebius screens relatively well as its AI cloud stack appears better positioned to support fine-tuned open-source models for enterprise customers seeking cheaper alternatives to frontier models.
Nebius Group NV (NASDAQ:NBIS) is a technology company that provides infrastructure and services to AI builders worldwide. It offers Nebius AI, an AI-centric cloud platform that provides full-stack infrastructure, including large-scale GPU clusters, cloud services, and developer tools.
8. Intuitive Surgical Inc. (NASDAQ:ISRG)
Potential Upside: 37.7%
On July 6, Evercore ISI lowered its target price for Intuitive Surgical Inc. (NASDAQ:ISRG) to $430 from $480 and kept an In Line rating on the stock. The firm’s Q2 preview for MedTech, Life Sciences Tools, and Diagnostics shows that demand remains stable, with healthy procedure volumes and continued spending on new equipment across the industry.
The company is set to announce its Q2 fiscal 2026 earnings report on July 16. As per the company’s Q1 outlook, it anticipated revenue growth in the coming quarters with the expansion of its da Vinci systems, particularly in international markets. The company expected full-year da Vinci procedure growth within a range of 13.5% to 15.5%. Moreover, the company expected its non-GAAP gross profit margin to be between 67.5% and 68.5% of revenue. Other income was expected to total between $315 million and $335 million due primarily to lower average cash balances following share repurchase activity in Q1. Considering Evercore ISI’s comments on stable demand, the company can be expected to deliver on its guidance, making the stock a worthy watch during the month of July.
Intuitive Surgical Inc. (NASDAQ:ISRG) engages in the development, manufacturing, and marketing of da Vinci surgical systems and the Ion endoluminal system. The company is headquartered in Sunnyvale, California.
7. Microsoft Corporation (NASDAQ:MSFT)
Potential Upside: 41.5%
So far in July, analyst sentiment towards Microsoft Corporation (NASDAQ:MSFT) has remained positive, even though the stock continues to be out of favor with investors. According to a report released on July 6, D.A. Davidson analyst Gil Luria maintained a Buy rating on the shares but did not assign a price target. However, based on 62 Wall Street analysts covering the stock, the median price target is $550. A day before D.A. Davidson’s update, Chris Caso of Wolfe Research also maintained a Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a $525 price target. The firm’s assigned price target is slightly below the median Wall Street analysts’ price target.
Microsoft-backed semiconductor company Syntiant Corp. has filed for an initial public offering (IPO) on July 7. The company plans to list its shares on the Nasdaq under the ticker SYTN, though it has not yet disclosed the size of the offering. Founded in 2017, Syntiant develops low-power semiconductor and software solutions. The company’s technology enables AI processing directly on devices instead of relying heavily on the cloud. Microsoft Global Finance is one of its investors, alongside Intel and Knowles Corp.
Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.
6. Salesforce Inc. (NYSE:CRM)
Potential Upside: 41.6%
On July 7, Salesforce Inc. (NYSE:CRM) announced plans to invest $1 billion in Switzerland over the next five years. The investment is aimed at supporting the country’s adoption of agentic artificial intelligence (AI). The initiative will strengthen the company’s presence in Switzerland by supporting its local workforce, helping build AI skills across the country, and expanding its network of partners and customers.
The announcement came during Chair and CEO Marc Benioff’s visit to Switzerland ahead of the AI for Good Global Summit in Geneva. According to Salesforce, the new commitment builds on its long-standing presence in the country. The company described the country as a global hub for finance technology, innovation, and AI governance.
Moreover, Salesforce Inc. (NYSE:CRM) also pointed to the growing adoption of its Agentforce platform among organizations in industries such as life sciences, energy, and banking. The company believes the platform is helping businesses enhance customer engagement and improve productivity through AI-powered capabilities. The latest investment reinforces Salesforce’s continued focus on expanding its AI business, which could strengthen its long-term growth outlook.
Salesforce Inc. (NYSE:CRM) is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics. Its Customer 360 platform, powered by data tools and trusted AI, enables organizations to unify customer data and drive personalized engagement.
5. NRG Energy Inc. (NYSE:NRG)
Potential Upside: 44.9%
Gabriele Sorbara from Siebert Williams Shank & Co started coverage of NRG Energy Inc. (NYSE:NRG) with a Buy rating and assigned it a $184 price target on July 6. The firm’s price target suggests a further 33% upside from here on. It believes the company is well positioned due to its diversified power generation business. NRG has 25.5 GW of generation capacity, providing it a strong position in the power market. The company also operates one of the largest retail electricity and natural gas platforms in the United States. Even though NRG isn’t a pure-play on AI, its role in AI infrastructure is instrumental and is therefore one of the best AI stocks to watch in July.
Photo from PBF Energy LinkedIn
According to Gabriele Sorbara, NRG Energy’s retail business is undervalued despite its stable earnings and large scale. The firm believes these strengths position the company well for long-term growth and support a bullish outlook on the stock.
On a more bullish note, Wells Fargo analyst Shahriar Pourreza raised his price target on NRG Energy Inc. (NYSE:NRG) while keeping a Buy rating on July 2. The analyst increased the firm’s price target on the stock from $140 to $239. The upwardly adjusted price target implies an attractive 73% upside from current levels.
NRG Energy Inc. (NYSE:NRG) is a utilities company that specializes in energy and home services through its Texas, East, West/Other, Vivint Smart Home, and Corporate Activities segments. The company provides its services to a diverse range of customers, from data centers to wholesale.
4. Vistra Corp. (NYSE:VST)
Potential Upside: 47.7%
Shahriar Pourreza of Wells Fargo reaffirmed a Buy rating on Vistra Corp. (NYSE:VST) on July 2. However, the analyst raised the firm’s price target on the stock from $152 to $259. The revised price target reflects an additional 66% upside from current levels. This upside is higher than the median Wall Street analysts’ upside of 47%.
Vistra Corp was selected as the preferred power provider for Helix Digital Infrastructure investments earlier this month. The initiative is led by KKR, along with partners such as Nvidia and the Kuwait Investment Authority, and begins with capital commitments exceeding $10 billion. On the occasion, CEO of Vistra Corp, Jim Burke, mentioned the importance of the company’s existing power capabilities and grid experience, highlighting the 5 GW of power purchase agreements with hyperscalers:
Vistra has a proven track record in executing more than 5,000 megawatts of power purchase agreements with hyperscalers and looks forward to leveraging our leading and diverse generation fleet and operational expertise as Helix’s preferred power partner to help deliver the reliable, affordable energy these customers require.
Since this development, various analysts have issued updates, including Goldman Sachs, which has a price target of $209 on the stock, and Seaport Global, which raised its target price from $227 to $230.
Vistra Corp. (NYSE:VST) is one of the largest competitive power generators in the United States. The company operates a power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities in the country.
3. Constellation Energy Corporation (NASDAQ:CEG)
Potential Upside: 53.9%
Constellation Energy Corporation (NASDAQ:CEG) is one of the best AI stocks to watch in July. On July 3, Wells Fargo analyst Shahriar Pourreza reiterated a Buy rating on the stock and assigned a target price of $516. The firm’s price target suggests an impressive 110% upside from the current levels. This upside is higher than the median Wall Street analysts’ upside of 53.9% based on 25 analysts’ estimates.
In our previous coverage of the stock, we mentioned the company’s long-term nuclear power purchase agreement with Walmart. Under the agreement, CEG will provide emissions-free electricity from Constellation’s Dresden Clean Energy Center in Illinois, representing around 176 MW of wholesale power supply. In this way, CEG is not only helping build local power infrastructure but also helping Walmart fulfill its clean energy objectives. The stock has hit fresh 52-week lows in July, and with power currently the biggest long-term bottleneck in AI infrastructure, CEG becomes one of our top AI stocks to watch in July.
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy supplier specializing in reliable, emissions-free energy for businesses, homes, and public sector customers.
2. Micron Technology Inc. (NASDAQ:MU)
Potential Upside: 70.51%
On July 6, Vivek Arya of Bank of America Securities reiterated a Buy rating on Micron Technology Inc. (NASDAQ:MU) and set a target price of $ 1,550. The analyst’s price target suggests a further 57% upside, which sits just below the median analyst upside on Wall Street of 70.5%.
The firm noted that the recent slowdown in AI infrastructure spending is only a temporary adjustment and does not alter the long-term growth outlook for AI demand. BofA expects global cloud and AI infrastructure capital expenditure to reach $1.5 trillion by 2027, increasing another 40-50% year over year. The growth will be supported by rising AI usage, wider adoption of AI agents, and limited availability of the infrastructure needed to support AI.
BofA analysts, led by Vivek Arya, remarked,
After an 88% surge in Q2, the SOX has corrected 11% in Q3, consistent with its historically weakest seasonal period. We view the current pullback as a healthy reset, not a structural change in AI demand. Near-term leadership may favor lower-beta names such as NVDA, TXN, ADI, CDNS and SNPS, but history suggests periods of consolidation are often followed by renewed momentum as investors regain confidence in the next leg of earnings and capex growth.
Moreover, major cloud companies are currently focused more on expanding capacity and growing their AI businesses rather than reducing costs related to existing infrastructure. The analysts added that as companies provide more clarity on their cloud spending plans for 2027, they expect memory chip companies, such as MU, to see renewed growth and stronger performance.
Micron Technology Inc. (NASDAQ:MU) provides memory and storage solutions sold into client, cloud server, enterprise, graphics, networking, smartphone, mobile-device, automotive, industrial, and consumer markets, among others.
1. Oracle Corporation (NYSE:ORCL)
Potential Upside: 71.6%
On July 6, Billy Fitzsimmons, an analyst at Piper Sandler, reiterated a Buy rating on Oracle Corporation (NYSE:ORCL) and set a target price of $225. The analyst’s price target reflects a further 56% upside from current levels.
On a more positive note, on July 1, ORCL was added to William Blair’s Conviction List, an investment firm. The firm believes the company will outperform the broader market because it is likely to be one of the major beneficiaries of artificial intelligence. Hyperscalers have signed multiyear cloud capacity commitments with Oracle. This has boosted its remaining performance obligations and provided revenue visibility. Furthermore, with the AI tailwind, the cloud computing giant is well positioned for accelerating revenue growth. Its full-stack capabilities, including the OCI cloud platform, database business, and enterprise applications, support its ability to benefit from rising AI infrastructure demand.
However, the company noted that building new data centers may end up costing more or taking longer than expected. This could happen because of supply chain issues, government restrictions on data center development, or the failure of third parties to complete projects on schedule. The company believes its profitability could be affected if it cannot secure data center capacity at affordable costs or properly manage its infrastructure needs. The stock’s recent performance was already suffering mainly due to fears that its RPO depended heavily on OpenAI’s success. Uncertainty around data center cost will likely drag the price down in the short term.
Oracle Corporation (NYSE:ORCL) provides information technology-related products and services to enterprises through its main business segments: Cloud and License, Hardware, and Services. The company is based in Austin, Texas, and was founded in June 1977 by Lawrence Joseph Ellison, Robert Nimrod Miner, and Edward A. Oates.
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