In this article, we will explore the 12 Best Mid-Cap AI Stocks to Buy According to Analysts.
AI stocks continue to take all the limelight in the stock market, with some doubling in the span of just over a month. For many, this sounds like a bubble, and we may agree. However, the AI infrastructure buildout isn’t stopping anytime soon. It is a race that all companies want to win at all costs, and spending is therefore not a major issue for them right now. This ambition continues to provide earnings growth and, as a result, stock price appreciation for many companies.
This sentiment was also reflected by some notable business leaders in the US recently. For example, in an interview with Caroline Woods of TheStreet, fund manager Bill Ackman discussed whether AI was a bubble or a boom. His one-word response was ‘Boom’. He also said:
“We have a massive AI infrastructure buildout… and then AI itself is this very powerful productivity force. Every company today is trying to figure out how to use AI to enhance their business and so there’s a very large… You know, enormous tailwind.”
The CEOs of two major AI model companies also had a similar opinion a few months back. Sam Altman of OpenAI talked about the fast pace of growth when he said his company will have extremely powerful AI models soon. He said the takeoff will be faster than he had originally thought. Anthropic’s leadership has also been pretty vocal about the scale and importance of AI.
This fast-paced infrastructure development is generating a lot of growth among US companies, so we decided to take a look at the 12 best mid-cap AI stocks to buy according to analysts who are significantly benefiting from the AI buildout.
Our Methodology
To identify the 12 best mid-cap AI stocks to buy according to analysts, we compiled a list of stocks from various AI-themed ETFs. We then filtered for stocks with market caps between $2 and $20 billion. We then considered their potential upside according to Wall Street analysts and ranked them in ascending order of their 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 in the article is as per market close on June 5.
12. Applied Optoelectronics Inc (NASDAQ:AAOI)
Potential Upside: 4.52%
Applied Optoelectronics Inc (NASDAQ:AAOI) is primarily a fiber-optic networking company. While current analyst sentiment has mostly been priced in, the company’s technology, which could become mainstream once data centers move away from copper towards photonics, makes it a major AI beneficiary in the medium term. This is why, despite the limited upside, it has made our list of the best mid-cap AI stocks to buy according to analysts.
The firm receives limited analyst coverage and may therefore go under the radar. After its earnings report on May 7, several analysts updated their price targets, with Rosenblatt Securities’ $220 target the highest, implying 24% upside from here.
On May 14, Applied Optoelectronics Inc. (NASDAQ:AAOI) entered into an Equity Distribution Agreement that would allow the company to issue and sell up to $600 million of its common shares. The money raised from this will be used for corporate purposes like working capital, capital expenditures, and debt repayment. The company has the right to suspend or terminate the program at any time.
The stock is up 300% this year, and it all started with the large order for the 800G single-mode data center transceivers earlier in the year. The company also released its 400-miliwatt narrow-line-width pump laser. This helps transmit data at extreme speeds within the AI data center. While the stock has delivered impressive returns so far this year, the company still has to execute. The Equity Distribution Agreement will go a long way in helping the company stay on course with its ambitious targets.
Applied Optoelectronics Inc (NASDAQ:AAOI) manufactures advanced fiber-optic networking products. While the company was considered a niche component supplier before the AI boom, it is now an integral part of AI data centers, helping develop data centers of the future where data can travel at high speeds through light.
11. UiPath Inc. (NYSE:PATH)
Potential Upside: 15.7%
Raimo Lenschow from Barclays reaffirmed a Hold rating on UiPath Inc. (NYSE:PATH), along with the price target of $14 on June 1. The firm’s price target reflects an additional 33% upside from the current levels. This upside aligns with the median Wall Street analyst estimate of 15.7%, based on coverage from 23 analysts.
UiPath Inc. (NYSE:PATH) reported its first-quarter fiscal 2027 earnings on May 29, posting revenue of $418 million. Annual Recurring Revenue ARR for the quarter came in at $1.901 billion. On the profitability side, GAAP operating income reached $28 million, with non-GAAP operating income of $92 million. Adjusted free cash flow totaled $130 million.
CFO Ashim Gupta highlighted:
During the first quarter, we repurchased 20 million shares at an average price of $11.47 and repurchased an additional 2 million shares at an average price of $9.63 through May 27, 2026.
Going forward, the company expects the second-quarter revenue to range from $395 million to $400 million. In addition, ARR is expected to be between $1.929 billion and $1.934 billion. Non-GAAP operating income is estimated at approximately $75 million.
UiPath Inc. (NYSE:PATH) is a software infrastructure company that provides a range of robotic process automation (RPA) solutions. The company’s primary offering includes its UiPath platform.
Hedge Fund Resource Center