On February 25, NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang said the market has miscalculated the impact of AI on software companies. Speaking to CNBC’s Becky Quick, Huang pushed back against concerns that AI agents will take over and hurt the enterprise software industry.
Huang believes that “the markets got it wrong.” Instead of cannibalizing the enterprise software industry, he believes agentic AI will help software companies develop their software and improve efficiency. He sees this as “counterintuitive,” explaining that AI agents are not going to eliminate software tools but will use them instead.
After Huang’s interview, Dan Niles, founder and portfolio manager of Niles Investment Management, told CNBC:
“People need to remember that all everything — whether it’s the railroads, canals, the internet, all of these things tend to get overbuilt — and then we figure out who the winners and losers are going to be.”
Niles believes that not every software company will survive as AI threatens to automate workflows, reduce prices, and make it easier for new competitors to enter the market. He believes that the companies in the database and cybersecurity industries may be better positioned to deal with these changes.
With this background in mind, let’s take a look at the 15 AI stocks with explosive growth potential.
Source: unsplash
Our Methodology
To compile our list of the 15 AI stocks with explosive growth potential, we looked for the largest and most popular AI companies. We reviewed Insider Monkey’s database of prominent AI stocks and various online resources to compile a list of more than 50 AI stocks. Next, we focused on the stocks that analysts believe have the most potential for growth. Finally, we ranked the top 15 AI stocks with explosive growth potential based on their average price target upside potential according to analysts as of March 2, 2026.
Additionally, we mentioned the hedge fund sentiment surrounding the best AI stocks, which was taken from Insider Monkey’s Q4 2025 database of 1041 elite hedge funds.
Why do we care about what hedge funds do? 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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
15 AI Stocks With Explosive Growth Potential
15. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best AI stocks with explosive growth potential. On February 25, Piper Sandler reiterated its Overweight rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) with a $300 price target. This update comes after the company announced a major chip supply deal with Meta Platforms, Inc. (NASDAQ:META).
The company entered into a 6-gigawatt, multi-year engagement, with initial deployment expected to begin in the second half of 2026. Piper Sandler believes the deal could position Advanced Micro Devices, Inc. (NASDAQ:AMD) to generate about $100 billion in revenue over the next five years. The warrants tied to the deal are set to expire in February 2031, meaning the related revenue would be recognized before that date.
Piper Sandler added that it expects Wall Street analysts to raise their revenue and earnings per share estimates for Advanced Micro Devices, Inc. (NASDAQ:AMD) as the deal moves forward.
On February 24, Jefferies also reaffirmed its Buy rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) with a price target of $300. Jefferies said the deal with Meta Platforms, Inc. (NASDAQ:META) follows a structure similar to the company’s October 2025 agreement with OpenAI, where Advanced Micro Devices, Inc. (NASDAQ:AMD) agreed to exchange warrants for GPU revenue. The research firm pointed out that these deals come at a cost for the company. However, Jefferies noted that such deals are important for establishing a strong presence in the market and could help secure future business.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company that manufactures GPUs, microprocessors, and high-performance computing solutions and serves a number of high-growth industries like gaming, data centers, and AI.
14. SAP SE (NYSE:SAP)
SAP SE (NYSE:SAP) is one of the best AI stocks with explosive growth potential. On February 2, Barclays reduced its price target on SAP SE (NYSE:SAP) from $348 to $283 and maintained an Overweight rating on the stock.
This update comes after the company reported fourth-quarter results, which Barclays thinks “were softer.” However, the research firm said the drop in the share price after the results “appeared harsh.” Barclays believes many of the risks are already reflected in the stock’s current price.
Earlier, on January 30, BMO Capital also lowered its price target on SAP SE (NYSE:SAP) from $320 to $245 but kept its Outperform rating on the stock. BMO pointed to the company’s failure to meet its guidance on cloud computing business growth targets in the December quarter. This miss came even though SAP SE’s (NYSE:SAP) management had earlier expressed confidence in meeting or exceeding those targets.
The research firm pointed out that SAP SE (NYSE:SAP) “picked a poor time to miss,” especially as investors are already concerned about AI’s impact on the software industry.
Despite these concerns, BMO is “supportive of SAP’s cloud conversion story,” highlighting the company’s strong retention rate.
SAP SE (NYSE:SAP) is a German multinational software company with a leading position in enterprise applications and business AI. The company is one of the world’s largest providers of enterprise resource planning software.
13. Adobe Inc. (NASDAQ:ADBE)
Adobe Inc. (NASDAQ:ADBE) is one of the best AI stocks with explosive growth potential. On February 23, Jefferies reduced its price target on Adobe Inc. (NASDAQ:ADBE) from $400 to $290 and kept its Hold rating on the stock.
The research firm pointed out that application software companies have been hit harder than the broader software sector. Jefferies believes there is ongoing risk in certain segments and downgraded four companies in the space based on its new AI risk framework and company-specific concerns. The firm also cut price targets for several other stocks, including Adobe Inc. (NASDAQ:ADBE).
Earlier, on February 13, HSBC also lowered its price target on Adobe Inc. (NASDAQ:ADBE) from $388 to $302 and maintained its Hold rating on the stock. The research firm pointed to growing medium- to long-term competitive risks for Adobe Inc. (NASDAQ:ADBE) from AI tools. HSBC believes that these AI-powered tools could make it easier for users to access similar creative services, which could potentially weaken the company’s core creative business.
Adobe Inc. (NASDAQ:ADBE) is a global leader in digital media and digital marketing solutions. It provides creator tools and services to individuals, teams, and enterprises to create, publish, and promote content.
12. Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) is one of the best AI stocks with explosive growth potential. On February 9, Melius Research downgraded its rating on Microsoft Corporation (NASDAQ:MSFT) from Buy to Hold. The firm has a price target of $430 on the stock.
Melius noted there are concerns that the company’s 365 business could face pressure from AI. The research firm believes that Microsoft Corporation (NASDAQ:MSFT) needs to sharply increase capital expenditures to keep up with Alphabet Inc. (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN), which could impact free cash flow.
Additionally, Melius noted that if Microsoft Corporation (NASDAQ:MSFT) does not raise its spending now, it could signal execution problems or a need to manage earnings, neither of which will be positive for the company’s outlook.
Earlier, on February 5, Stifel also downgraded its rating on Microsoft Corporation (NASDAQ:MSFT) from Buy to Hold and reduced its price target from $540 to $392. Stifel analyst Brad Reback pointed to worries that Wall Street’s revenue and earnings expectations for Microsoft Corporation (NASDAQ:MSFT) for fiscal year 2027 are “too optimistic.” He pointed to supply constraints in the company’s Azure cloud business and rising competition in AI as key risks.
Microsoft Corporation (NASDAQ:MSFT) is an American technology company that specializes in AI-powered cloud, productivity, and business solutions. The company develops and markets software, services, and hardware.
11. Okta, Inc. (NASDAQ:OKTA)
Okta, Inc. (NASDAQ:OKTA) is one of the best AI stocks with explosive growth potential. On February 26, Cantor Fitzgerald lowered its price target on Okta, Inc. (NASDAQ:OKTA) from $115 to $100 and kept its Overweight rating on the stock. The research firm pointed to recent market contraction, even though its latest checks were solid.
According to Cantor Fitzgerald’s fourth-quarter fiscal 2026 checks, 21% respondents said demand was ahead of expectations. This is down from 39% in the third quarter of fiscal 2026. Partners described the quarter as steady, mainly supported by renewals and early-stage growth efforts.
On February 26, DA Davidson also reduced its price target on Okta, Inc. (NASDAQ:OKTA) from $140 to $110 and maintained its Buy rating. The research firm expects the company to report over $2.5 billion in current remaining performance obligations, above its guidance range of $2.445 billion to $2.45 billion.
DA Davidson’s positive outlook is based on stable to slightly improved net sales performance in its fourth-quarter channel survey, better sales representative attrition, and expectations for continued gains in sales productivity. The firm believes Okta, Inc. (NASDAQ:OKTA) could see growth reaccelerate by the second half of fiscal 2027. The firm pointed to ongoing improvements in sales execution and a meaningful expansion in sales capacity as key reasons for this expectation.
Okta, Inc. (NASDAQ:OKTA) is an American identity and access management company that provides security solutions for businesses and developers.
10. Applied Digital Corporation (NASDAQ:APLD)
Applied Digital Corporation (NASDAQ:APLD) is one of the best AI stocks with explosive growth potential. On February 18, Roth Capital reiterated its Buy rating on Applied Digital Corporation (NASDAQ:APLD) with a price target of $58. The research firm said it is “buying shares” after the stock fell in after-hours trading following news that NVIDIA Corporation (NASDAQ:NVDA) is selling its stake in Applied Digital Corporation (NASDAQ:APLD).
Roth Capital’s analyst said many things have changed since the earlier NVIDIA-led financing. The company has signed 2 colocation leases, one with CoreWeave, Inc. (NASDAQ:CRWV) and another with a hyperscaler, with a third lease expected to come soon. According to Roth Capital, the recent stock drop is driven more by “headline risk than any fundamental change” in the company’s investment story.
Earlier, on February 12, Citizens also reiterated its Market Outperform rating on Applied Digital Corporation (NASDAQ:APLD) with a $40 price target. The research firm pointed to its 400 megawatts (MW) of purpose-built capacity at its Polaris Forge 1 Campus, which is fully leased to CoreWeave, Inc. (NASDAQ:CRWV). The first 100MW became ready for service in November 2025. Another 150MW is scheduled to be ready by mid-2026, and the remaining 150MW is expected to come online in 2027.
Citizens also pointed out that Applied Digital Corporation (NASDAQ:APLD) has signed a 200MW lease with an investment-grade hyperscaler. This agreement includes an option for an additional 800MW, which could allow the company to reach a total deployment of 1 gigawatt (GW).
The research firm noted that the company has a 4.3GW active development pipeline, which makes it one of the largest high-performance computing (HPC) and artificial intelligence (AI) infrastructure providers in North America.
Applied Digital Corporation (NASDAQ:APLD) is a technology company that designs, develops, and operates digital infrastructure for the high-performance computing (HPC) and artificial intelligence (AI) industries.
9. Datadog, Inc. (NASDAQ:DDOG)
Datadog, Inc. (NASDAQ:DDOG) is one of the best AI stocks with explosive growth potential. On February 17, Stifel reiterated a Buy rating on Datadog, Inc. (NASDAQ:DDOG) with a price target of $160. This update comes after the company’s Investor Day event on February 12.
Stifel pointed to management’s presentation of growing opportunities in newer products and selling motions focused on user-first monitoring. Datadog, Inc.’s (NASDAQ:DDOG) leadership team also discussed expanding the idea of “closing the loop” from production to the software development life cycle. Other key topics included bring-your-own-cloud offerings and the use of AI to speed up remediation and increase autonomy across the platform.
Earlier, on February 12, Bernstein SocGen Group also reiterated its Outperform rating on Datadog, Inc. (NASDAQ:DDOG) with a price target of $180 after the company’s Investor Day event.
Bernstein analyst Peter Weed highlighted three main factors that support the firm’s long-term confidence in the company. He pointed to Datadog, Inc.’s (NASDAQ:DDOG) position in Bits.ai and the opportunity for the platform to accelerate pull-through.
The research firm also noted that the company’s on-premise offering could lower full-churn risk among its largest customers and also create opportunities to win new customers. Bernstein also highlighted Datadog, Inc.’s (NASDAQ:DDOG) aim to become a line-of-business software instead of focusing only on end-user productivity tools.
Datadog, Inc. (NASDAQ:DDOG) offers an AI-powered observability and security SaaS platform for cloud applications. It supports infrastructure monitoring, application performance monitoring, log management, user experience monitoring, and cloud security.
8. AppLovin Corporation (NASDAQ:APP)
AppLovin Corporation (NASDAQ:APP) is one of the best AI stocks with explosive growth potential. On February 26, Raymond James told clients in a note that software stocks appear to be starting to recover after a sharp two-month decline.
The research firm said the S&P 500 Software Industry Index is trying to stabilize near what it described as “major technical support.” Raymond James highlighted six major software companies, including AppLovin Corporation (NASDAQ:APP), that appear set for a rebound.
Earlier, on February 12, Scotiabank raised its price target on AppLovin Corporation (NASDAQ:APP) from $750 to $775 and kept its Sector Outperform rating. This update came after the company reported Q4 results, which beat analyst expectations for revenue, EBITDA, and earnings per share.
Scotiabank pointed out that despite the strong results, AppLovin Corporation (NASDAQ:APP) fell in after-hours trading after the earnings release. The research firm said this market reaction did not reflect the company’s fundamental performance.
On February 12, Needham also reiterated its Buy rating on AppLovin Corporation (NASDAQ:APP) with a price target of $700. Needham pointed to the company’s strong results and raised its 2026 estimates based on expected improvements in e-commerce revenue growth.
AppLovin Corporation (NASDAQ:APP) is an American technology company that offers end-to-end software and AI solutions for businesses of all sizes to reach, monetize, and grow their audiences.
7. ServiceNow, Inc. (NYSE:NOW)
ServiceNow, Inc. (NYSE:NOW) is one of the best AI stocks with explosive growth potential. On February 26, ServiceNow, Inc. (NYSE:NOW) announced the launch of its Autonomous Workforce, AI specialists designed to handle enterprise work by completing jobs with the required scope, authority, and governance. This helps free employees to focus more on strategic problem-solving and providing personalized service.
Autonomous Workforce by ServiceNow, Inc. (NYSE:NOW) uses AI specialists with defined roles to support teams. Unlike AI agents that complete single tasks, this system coordinates teams of AI specialists to manage work from start to finish. These roles include a Level 1 Service Desk AI Specialist, an Employee Service Agent, and a Security Operations Analyst. The AI specialists work with human employees, follow company policies and processes, learn from results and feedback from employees, and improve over time.
Additionally, just 2 months after closing its acquisition of Moveworks, ServiceNow, Inc. (NYSE:NOW) announced EmployeeWorks. This new offering combines the company’s unified portal and autonomous workflows with Moveworks’ conversational AI and enterprise search to convert natural language requests into governed, end-to-end execution for almost 200 million employees.
ServiceNow, Inc. (NYSE:NOW) is an American software and technology company. It provides an AI platform that helps organizations digitize, automate, and manage workflows for enterprise operations.
6. Riot Platforms, Inc. (NASDAQ:RIOT)
Riot Platforms, Inc. (NASDAQ:RIOT) is one of the best AI stocks with explosive growth potential. On February 19, Citizens reiterated its Market Outperform rating on Riot Platforms, Inc. (NASDAQ:RIOT) with a price target of $25. This update comes after Starboard, an investment adviser, delivered a public letter to Riot Platforms, Inc. (NASDAQ:RIOT) outlining that the company is not fully monetizing its power portfolio.
Starboard believes Riot Platforms, Inc. (NASDAQ:RIOT) is in a strong position to secure high-quality AI and high-performance computing (HPC) deals with its 1.7 gigawatts of fully available power. Starboard noted that the company’s Corsicana and Rockdale sites are two premier sites for AI and HPC hosting and could achieve attractive deal terms. Citizens acknowledged the progress Riot Platforms, Inc. (NASDAQ:RIOT) has made over the past year, including improvements in governance, better cost controls, and the launch of its AI and HPC strategy.
Earlier, on January 27, Keefe, Bruyette & Woods increased its price target on Riot Platforms, Inc. (NASDAQ:RIOT) from $16 to $23 and kept its Outperform rating on the stock. This update comes after the company signed a 10-year, 25-megawatt lease agreement with Advanced Micro Devices, Inc. (NASDAQ:AMD). Keefe, Bruyette & Woods believes this deal shows early momentum in Riot Platforms, Inc.’s (NASDAQ:RIOT) move toward high-performance computing.
Riot Platforms, Inc. (NASDAQ:RIOT) is a leading digital infrastructure company that specializes in the development of large-scale data centers and Bitcoin mining operations.
5. Astera Labs, Inc. (NASDAQ:ALAB)
Astera Labs, Inc. (NASDAQ:ALAB) is one of the best AI stocks with explosive growth potential. On February 11, Citi lowered its price target on Astera Labs, Inc. (NASDAQ:ALAB) from $275 to $250 and maintained its Buy rating on the stock.
This update comes after the company’s solid fourth-quarter and full-year 2025 results. Astera Labs, Inc. (NASDAQ:ALAB) reported record quarterly revenue of $270.6 million, up 17% compared to the previous quarter. For the full year 2025, revenue reached a record $852.5 million, marking a 115% increase year-over-year
On February 10, BofA Securities also raised its price target on Astera Labs, Inc. (NASDAQ:ALAB) from $185 to $200 and maintained a Neutral rating on the stock.
The research firm pointed to a newly announced $6.5 billion warrant agreement with Amazon.com, Inc. (NASDAQ:AMZN), noting that it strengthens long-term demand visibility and supports Astera Labs, Inc.’s (NASDAQ:ALAB) position within accelerating AI infrastructure buildouts. However, BofA Securities pointed out that the warrant agreement is expected to create about a 200 basis point headwind to gross margins.
Astera Labs, Inc. (NASDAQ:ALAB) is a semiconductor technology company that provides rack-scale AI infrastructure through purpose-built connectivity solutions.
4. SoundHound AI, Inc. (NASDAQ:SOUN)
SoundHound AI, Inc. (NASDAQ:SOUN) is one of the best AI stocks with explosive growth potential. On February 27, D.A. Davidson reiterated its Buy rating on SoundHound AI, Inc. (NASDAQ:SOUN) with a price target of $14 after the company reported Q4 results.
D.A. Davidson said the company finished 2025 on a strong note, beating revenue expectations as demand across industries supported growth during the quarter. According to the research firm, SoundHound AI, Inc. (NASDAQ:SOUN) continues to win and expand deals with major customers, including a large Japanese auto OEM. D.A. Davidson also pointed to the company’s recent agentic platform innovations and Voice Commerce offerings, which are helping to build momentum in its sales pipeline. The firm added that SoundHound AI, Inc. (NASDAQ:SOUN) is gaining market share in a growing total addressable market and is making progress towards profitability.
However, on February 27, Piper Sandler cut its price target on SoundHound AI, Inc. (NASDAQ:SOUN) from $11 to $9 and maintained its Neutral rating on the stock.
Piper Sandler sees the recent quarter as mixed, noting that revenue was mostly in line with expectations but profitability missed estimates. The research firm noted that while guidance came in higher than expected, there are concerns about the need for strong execution or M&A activity to meet targets, given the company’s current business run rate.
SoundHound AI, Inc. (NASDAQ:SOUN) is a leader in conversational intelligence and voice AI solutions for creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants.
3. Oracle Corporation (NYSE:ORCL)
Oracle Corporation (NYSE:ORCL) is one of the best AI stocks with explosive growth potential. On February 24, Oppenheimer upgraded its rating on Oracle Corporation (NYSE:ORCL) from Perform to Outperform and set a price target of $185.
The firm’s analyst, Brian Schwartz, said the “call may be early, since it will take time for Oracle Corporation (NYSE:ORCL) to show financial success as a more capital-intensive business in future results.” However, he sees a “favorable risk/reward after the stock’s multiples have been cut by more than half since September.” Schwartz also pointed out that Oracle Corporation (NYSE:ORCL) remains “relatively immune from AI disruption” and is “broadly underowned by institutional investors.”
Earlier, on February 9, Melius Research downgraded its rating on Oracle Corporation (NYSE:ORCL) from Buy to Hold and set a $160 price target. While Melius Research praised the company’s CEO, Larry Ellison, for “going for it,” it warned that the company could face challenges as debt and equity could weigh on the stock for some time.
The research firm believes that Oracle Corporation (NYSE:ORCL) should be valued “more akin to an infrastructure company vs. a software company.”
Oracle Corporation (NYSE:ORCL) is an American multinational computer technology company specializing in database software, cloud infrastructure, and enterprise software solutions. The company offers one of the industry’s broadest and deepest suites of AI-powered cloud applications.
2. Atlassian Corporation (NASDAQ:TEAM)
Atlassian Corporation (NASDAQ:TEAM) is one of the best AI stocks with explosive growth potential. On February 9, Citi lowered its price target on Atlassian Corporation (NASDAQ:TEAM) from $210 to $160 and kept its Buy rating on the stock.
This update comes after the company reported its fiscal Q2 results. Citi pointed to “sector turmoil” as the reason for the reduction in the price target. The research firm noted that the company’s fundamentals are “sound.”
Earlier, on February 6, Baird also lowered its price target on Atlassian Corporation (NASDAQ:TEAM) from $170 to $140 and kept an Outperform rating on the stock. The research firm said it updated its model following the company’s fiscal Q2 results.
Also on February 6, BMO Capital reduced its price target on Atlassian Corporation (NASDAQ:TEAM) from $135 to $130 and kept an Outperform rating on the stock. According to BMO Capital, the company delivered solid results across several key metrics, including seats. Management also slightly raised its fiscal 2026 targets, excluding the impact of mergers and acquisitions.
BMO Capital noted that Atlassian Corporation (NASDAQ:TEAM) will need to continue delivering strong results over several quarters into fiscal 2027 before the stock moves higher.
Atlassian Corporation (NASDAQ:TEAM) is a leading AI company that specializes in software development, work management, and enterprise service management software aimed at enhancing team collaboration and productivity.
1. Strategy Inc (NASDAQ:MSTR)
Strategy Inc (NASDAQ:MSTR) is one of the best AI stocks with explosive growth potential. On February 26, Benchmark reiterated its Buy rating on Strategy Inc (NASDAQ:MSTR) with a price target of $705.
The research firm pointed out that the company’s decision to use STRC as its main tool to fund Bitcoin purchases makes strategic sense. According to Benchmark, this approach allows the company to increase its Bitcoin per share at a faster pace.
Earlier, on February 6, Benchmark reiterated its Buy rating on Strategy Inc (NASDAQ:MSTR) with a price target of $705. The firm’s high price target is based on a sum-of-the-parts analysis, which takes into account different factors expected through the end of 2026.
The valuation includes the estimated value of Strategy Inc’s (NASDAQ:MSTR) AI-powered software business by year-end 2026. The reiteration by Benchmark came after the company’s Q4 2025 results. For the quarter, the company’s AI software segment reported subscription services revenue of $51.8 million, up 62.1% year-over-year.
Additionally, Benchmark’s price target assumes that Bitcoin will reach $225,000 by the end of 2026.
Strategy Inc (NASDAQ:MSTR) is an American company that has adopted Bitcoin as its primary treasury reserve asset. The company also provides advanced AI-powered enterprise analytics software.
While we acknowledge the potential of MSTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSTR and that has a 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 12 Best Stocks Under $10 to Invest In Right Now and 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.
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