In this article, we will look at the 5 Best AI Stocks to Watch in July. Please visit the 10 Best AI Stocks to Watch in July if you would like to see the full list and the methodology behind it.
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.
While we acknowledge the potential of ORCL to grow, 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 ORCL and that has 100x upside potential, check out our report about the cheapest AI stock.
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