In this article, we take a look at the 10 Best Performing AI Stocks Over the Last 3 Years.
The strongest AI-linked stock returns of the past three years have often followed the physical buildout of computing capacity rather than the broad software narrative alone. Chips, memory, optical links, storage, power systems, cooling equipment, and rack integration have all become important parts of a capital-intensive supply chain. Stanford HAI’s 2026 AI Index puts global corporate AI investment at $581.7 billion in 2025, up 130% from 2024, while private AI investment reached $344.7 billion. The scale of deployment is also visible in electricity use. The International Energy Agency says data centers consumed about 485 terawatt-hours in 2025, with demand rising 17%. Electricity use at AI-focused facilities increased 50%.
Spending remains elevated. Reuters reported that JPMorgan expected five large technology companies to invest roughly $730 billion in 2026. That supports demand across the infrastructure chain, but it also raises the standard for execution. Power availability, component supply, financing costs, and the pace of customer monetization may determine which businesses retain pricing power. PIMCO has estimated that capital spending could absorb 94% of major hyperscalers’ operating cash flow over the next two years, compared with 40% in 2023. The industry backdrop is therefore substantial, though high valuations and the possibility of overbuilding still warrant some restraint.
Source: unsplash
Methodology
We screened U.S.-listed companies with material exposure to the AI value chain and reviewed their full three-year trading history through the July 9 close. From these, we selected 10 companies with the highest 3-year annualized returns and ranked them accordingly.
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10. Ciena Corporation (NYSE:CIEN)
Ciena Corporation (NYSE:CIEN) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 120.4%. On June 8, UBS reiterated its Hold rating on the stock and raised its price target to $508 from $285. The action followed Ciena’s fiscal second-quarter report, where revenue rose 40% year over year to $1.57 billion, and adjusted earnings came in ahead of FactSet estimates, MarketWatch reported. UBS analyst David Vogt’s caution centered on expectations rather than the headline numbers.
He wrote that the market had been pricing in a “more material beat and raise” than Ciena delivered. Ciena still raised its fiscal 2026 revenue outlook to $6.2 billion to $6.4 billion and guided fiscal third-quarter revenue above Wall Street estimates. The gap between strong results and an even stronger setup explains the neutral stance: Ciena remained tied to AI-driven optical networking demand, but the stock had already climbed sharply into the report. Ciena also said its high-speed connectivity strategy across wide-area networks and data centers was aligned with multi-year AI demand.
Ciena Corporation (NYSE:CIEN) provides networking systems, services, and software used by communications service providers, cloud operators, governments, and enterprises to move, manage, and optimize high-bandwidth network traffic.
9. Vertiv Holdings Co (NYSE:VRT)
Vertiv Holdings Co (NYSE:VRT) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 134%. On June 12, Vertiv completed its acquisition of ThermoKey, an Italian provider of heat-rejection and heat-exchange equipment. The transaction adds dry coolers, heat exchangers, and systems compatible with low-global-warming-potential and natural refrigerants. It also expands manufacturing capacity in Europe, the Middle East, and Africa. That is relevant to AI infrastructure because rising rack densities are making cooling design a facility-level constraint, not merely an accessory to server deployment.
Vertiv has already used ThermoKey technology in selected products, which may reduce integration risk. The combination also extends Vertiv’s coverage across the thermal chain, allowing it to address heat removal beyond the immediate rack. The investor question is whether the acquired capacity can be converted into profitable growth without weakening execution. The deal appears strategically aligned with demand for denser computing, but returns will still depend on project timing, pricing and disciplined integration.
Vertiv Holdings Co (NYSE:VRT) supplies critical digital infrastructure, including power management, thermal management, racks, monitoring systems, and lifecycle services for data centers, communications networks, and commercial and industrial facilities.
8. Lumentum Holdings Inc. (NASDAQ:LITE)
Lumentum Holdings Inc. (NASDAQ:LITE) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 143.31%. On June 11, JPMorgan analyst Samik Chatterjee reiterated an Overweight rating and maintained a $1,130 price target, arguing that the recent pullback in optical-networking stocks had created a buying opportunity.
Chatterjee said Lumentum shares had fallen about 15% from their early-June high as investors worried about limited summer catalysts and possible delays in co-packaged optics adoption. He pushed back on those concerns, citing supply-chain checks indicating that Nvidia’s large-scale CPO rollout remained on track and may be ahead of schedule. JPMorgan also pointed to growing interest from cloud-service providers and other customers, which could broaden demand beyond Nvidia.
Co-packaged optics places optical engines close to switch chips to increase bandwidth while reducing power consumption in large AI systems. JPMorgan viewed Lumentum’s valuation of roughly 25 times estimated 2028 earnings as reasonable, given projected annual earnings growth above 40%. The thesis still depends on deployment schedules, customer concentration and Lumentum’s ability to convert product demand into sustained shipments and earnings growth.
Lumentum Holdings Inc. (NASDAQ:LITE) develops optical and photonic technologies for AI and cloud networking, telecommunications, industrial manufacturing and sensing, including lasers, components, modules and optical subsystems.
7. Applied Optoelectronics, Inc. (NASDAQ:AAOI)
Applied Optoelectronics, Inc. (NASDAQ:AAOI) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 144.7%.
On June 21, Rosenblatt Securities analyst Michael Genovese reiterated a Buy rating and maintained a $220 price target. The firm’s documented thesis has centered on Amazon-related 800G revenue, potential Oracle qualifications and a product mix spanning 100G, 400G, 800G and 1.6T connectivity. That view is supported by more than $324 million of reported orders for 800G and 1.6T products tied to hyperscale demand. That backlog makes execution the focus. Orders and customer qualifications must convert into shipments, while higher volumes need to improve profitability and cash flow. AAOI’s vertically integrated manufacturing model can help with cost and supply control, yet rapid capacity expansion creates its own operational burden.
Customer concentration is another important consideration, as a delayed qualification or a changed deployment schedule can materially affect results. Rosenblatt’s reiteration indicates confidence in the optical ramp, while the order base provides a measurable benchmark for subsequent delivery.
Applied Optoelectronics, Inc. (NASDAQ:AAOI) designs and manufactures optical networking products, including lasers, transceivers and related equipment for internet data centers, cable television networks, telecommunications and fiber-access markets.
6. Seagate Technology Holdings plc (NASDAQ:STX)
Seagate Technology Holdings plc (NASDAQ:STX) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 151%. On July 1, Bank of America analyst Wamsi Mohan reiterated a Buy rating and raised his price target to $1,150 from $1,000. Mohan’s thesis pointed to improving fundamentals, sustained cloud demand and greater discipline in adding hard-drive capacity. He also highlighted build-to-order contracts that support measured price increases, along with the transition to higher-capacity heat-assisted magnetic recording drives.
Those factors could improve revenue visibility, margins, and free cash flow if customer demand remains firm. The AI link is primarily storage economics: training and inference create large datasets that cloud operators must retain at scale, where high-capacity hard drives remain cost-effective. The principal risk is cyclical. Strong pricing can encourage future supply, while customers can pause purchases after capacity additions. The current analyst case rests on disciplined industry behavior and a durable data-center demand cycle, not demand alone.
Seagate Technology Holdings plc (NASDAQ:STX) develops mass-capacity data-storage products and systems, including hard disk drives and enterprise storage used by cloud, edge, consumer, and AI data-center customers.
5. Micron Technology, Inc. (NASDAQ:MU)
Micron Technology, Inc. (NASDAQ:MU) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 152%.
On June 24, Micron disclosed 16 strategic customer agreements carrying $22 billion of commitments to secure memory-chip supply. Reuters reported that the multi-year arrangements include take-or-pay provisions, cash deposits, and pricing floors; 14 agreements represented roughly $100 billion of remaining performance obligations. The structure is notable because it asks customers to share more of the capacity and pricing risk that memory producers historically carried themselves.
Micron also reported quarterly revenue of $41.46 billion and adjusted earnings of $25.11 per share. Management said AI demand and structural supply constraints could keep conditions tight beyond 2027. That outlook is supportive, but the contracts do not eliminate cyclicality. Additional industry capacity, cheaper memory alternatives, or weaker end demand could eventually reduce pricing power. For now, the agreements provide a firm demand signal and show how critical high-bandwidth memory and storage have become to AI deployments.
Micron Technology, Inc. (NASDAQ:MU) develops memory and storage products, including DRAM, NAND, NOR, high-bandwidth memory, and solid-state drives for data centers, AI systems, clients, mobile devices, vehicles, and industrial applications.
4. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Credo Technology Group Holding Ltd (NASDAQ:CRDO) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 153%. On July 6, William Blair analyst Sebastien Naji named Credo his top semiconductor pick for the next six months. That followed several constructive June calls. Evercore ISI analyst Mark Lipacis initiated coverage on June 22 with an Outperform rating and a $325 target, describing Credo as an AI-connectivity leader moving from a mainly copper portfolio toward a combined copper-and-optical offering.
The same day, Stifel analyst Tore Svanberg maintained a Buy rating and raised his target to $350 from $250 after management meetings, citing the company’s vertically integrated, system-level approach across both technologies. Bank of America kept Buy on June 26. The common thread is that larger AI clusters require more high-speed, energy-efficient connections. Credo’s active electrical cables, digital signal processors and optical products address that need. Risks include customer concentration, rapid interface transitions, and expectations that already assume substantial growth.
Credo Technology Group Holding Ltd (NASDAQ:CRDO) provides high-speed connectivity solutions, including active electrical cables, digital signal processors, retimers, SerDes chiplets, and optical components for hyperscale, cloud, and AI networks.
3. AppLovin Corporation (NASDAQ:APP)
AppLovin Corporation (NASDAQ:APP) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 168%. On June 29, Raymond James analyst Andrew Marok initiated coverage with a Strong Buy rating and a $640 price target. Marok identified expansion into e-commerce advertising as a significant long-term opportunity and tied his thesis to continued improvement in AppLovin’s AI models, monetization of mobile in-app advertising and a financial profile marked by high margins and cash conversion.
By July 2, AppLovin Ads had opened to all advertisers and removed its referral requirement. Broader distribution gives the company a clearer test of whether its AXON technology can work beyond its established gaming base. The opportunity is accompanied by execution risk: adding advertisers is different from retaining their budgets at attractive returns. Wells Fargo’s July 7 note kept an Overweight rating and nudged its target to $575, but flagged weaker mobile-game return on ad spend, modest web-advertiser growth and competitive pressure.
AppLovin Corporation (NASDAQ:APP) operates an advertising technology platform that uses AI-based tools to match advertisers with audiences, optimize campaigns, and support monetization across mobile apps, connected television, and e-commerce.
2. Western Digital Corporation (NASDAQ:WDC)
Western Digital Corporation (NASDAQ:WDC) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 173%. On June 15, Morgan Stanley analyst Erik Woodring maintained an Overweight rating and raised his price target to $650 from $488. Woodring’s thesis centered on a widening hard-disk-drive shortage. He estimated demand was growing 40% to 50% annually against supply growth of 30% to 35%, with cloud expansion and AI inference increasing storage requirements. Rising NAND flash prices also make high-capacity hard drives more economically attractive for some large datasets, supporting more predictable pricing. Western Digital shares gained 16% that day, leading the S&P 500.
Bank of America reiterated Buy with a $732 target on July 1. The durability of the thesis depends on supply discipline and workload growth. If customers delay deployments, reuse existing capacity, or shift their storage mix, tightness could ease. For now, analyst attention has moved from unit volumes toward pricing power and data-center demand visibility.
Western Digital Corporation (NASDAQ:WDC) develops data-storage devices and platforms, with a primary focus on high-capacity hard disk drives used in cloud data centers, enterprise systems, video applications, and consumer storage.
1. Celestica Inc. (NYSE:CLS)
Celestica Inc. (NYSE:CLS) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 185%. In early June, RBC Capital analyst Paul Treiber maintained an Outperform rating and a $440 price target. Treiber cited stronger 2026 and 2027 outlooks, while noting that component shortages had limited first-quarter upside.
In another important development, on July 6, the company appointed Steven Dorwart president of Connectivity and Cloud Solutions, succeeding Jason Phillips, who will remain an adviser through year-end. A 21-year veteran, Dorwart previously ran global accounts within the segment. Connectivity and Cloud Solutions houses much of Celestica’s data-center networking, compute and storage activity, including high-speed Ethernet platforms and rack-level systems. The leadership handoff matters because the segment is managing rapid product transitions and customer programs that require timely engineering execution. Dorwart’s customer background may support continuity, but the operating bar is high. Investors will need to assess whether the division can sustain growth while managing concentration, component supply, and the shift toward 1.6-terabit networking.
Celestica Inc. (NYSE:CLS) provides design, engineering, manufacturing, supply chain, and platform solutions, including networking, compute, storage, rack integration, and power and thermal systems for AI, cloud, and hybrid-cloud infrastructure.
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