AI stocks had a brutal week. Last Thursday, the S&P 500 fell 4.4%, its biggest one-day drop since the April 2025 tariff shock. The Dow Jones Industrial Average lost more than 1,800 points, and the Nasdaq Composite tumbled 5.5%. The slide erased the market’s gain from the day before, its best in three months. Stock markets around the world felt the pressure, and South Korea’s Kospi index fell 5.3%.
The Nasdaq slid into a correction, the term Wall Street uses for a drop of more than 10% from a recent peak. Volatility spiked as well. Wall Street’s fear gauge, the VIX, posted its biggest one-day jump in over two years, Futurum Equities chief market strategist Shay Boloor pointed out.
Data Center Worries Rattle Chip Stocks
Stocks tied to the buildout of AI data centers led the slide. Investors had cheered the midterm election results a day earlier, then turned anxious about what a Democratic Congress could mean for the spending that feeds those data centers. We covered the group’s earlier pullback in our list of oversold AI stocks that Wall Street analysts saw 50%+ upside in, published before the selloff.
Goldman Sachs estimates that about 45% of planned US data center capacity now faces possible restrictions, after newly elected state governors promised to stop or pause construction, Yahoo Finance reported.
AI stocks had already been swinging for months on worries that building more data centers may slow because borrowing has become so expensive. Last month, Baird tech strategist Ted Mortonson said the selloff is increasingly about who needs financing and what that financing costs. Chip stocks took the hardest hit, in their worst selloff since 2020, and about $3 trillion in stock market value vanished in a single session.
A Partial Rebound as Treasury Yields Stay High
Stocks recovered some ground. The S&P 500 and Nasdaq rebounded on Friday, and on Wednesday each climbed more than 1% as the semiconductor index jumped 7%, Reuters reported. Readers who follow the group can find more names in our list of the best semiconductor stocks to buy for the next decade.
Government bond yields remain a worry. The 10-year Treasury yield was hovering around 5.0% this week, a level that keeps pressure on stocks that are priced for fast growth. On Thursday, the Nasdaq slipped 0.4% as the 10-year yield rose to 5.09%, Yahoo Finance reported, as investors weighed the odds of more Federal Reserve rate hikes.
Our Methodology
For this article, we used Finviz to screen for large-cap and mega-cap US-listed stocks with a Buy or better analyst rating, an average analyst price target at least 30% above the current share price, and a share price gain of more than 50% over the past year. We then picked the 11 stocks with the highest average upside potential, based on analysts’ average price target, and ranked them in ascending order, using data as of November 12, 2026.
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 strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
11 Unstoppable Stocks to Buy According to Analysts
11. Coherent (NYSE:COHR)
Average Upside Potential: 60%
Market Cap: $45.90 billion
1-Year Performance: 66.49%
Pro forma revenue grew 56% in the fiscal first quarter, and reported revenue was $2.37 billion, so Coherent’s management expects an even faster year ahead. Chief Executive Officer Jim Anderson said the company now expects pro forma revenue growth above 60% in fiscal 2027. Coherent makes the lasers and optical parts that let AI data centers move information as light instead of electricity, and those centers are its main source of growth.
The company is also turning that growth into earnings. Non-GAAP earnings per share grew faster than sales, and Anderson called the fiscal first quarter a strong start to the year. Chief Financial Officer Sherri Luther said the quarter delivered substantial operating leverage and durable gross margin expansion, driven by pricing and cost improvements. That gave management the confidence to raise its longer-term goal to a non-GAAP gross margin above 45% before the end of calendar 2028.
For the fiscal second quarter, Coherent guided to revenue of $2.55 billion to $2.75 billion, which would be another step up. How the price compares with that outlook is the subject of our analysis of whether Coherent is fairly valued.
10. Lumentum (NASDAQ:LITE)
Average Upside Potential: 69%
Market Cap: $56.61 billion
1-Year Performance: 175.13%
Lumentum makes the lasers and optical parts that carry data between AI servers, and its sales more than doubled over the year. Revenue was $1.26 billion in the fiscal first quarter, against $533.8 million a year earlier. Chief Executive Officer Michael Hurlston said growth came across all of its businesses, led by pump lasers and optical circuit switches.
Guidance points higher still. For the fiscal second quarter, Lumentum expects revenue of $1.575 billion to $1.625 billion, and it projects an operating margin that would be its highest yet.
Then came a takeover offer. Marvell agreed to acquire the company in an all-stock deal at a fixed ratio of 4.5 Marvell shares for each Lumentum share. The companies said that implied about $1,132 per share before talks were reported, and because payment is in stock, the value moves with Marvell’s shares. Lumentum holders would own about 33% of the combined company, and Marvell Chief Executive Officer Matt Murphy would lead it. Hurlston said the combination creates a category leader in AI connectivity, with long-term value well above what Lumentum could deliver alone. Demand that outruns supply is the theme of our analysis of whether Lumentum’s valuation can hold up.
9. Tower Semiconductor (NASDAQ:TSEM)
Average Upside Potential: 71%
Market Cap: $17.90 billion
1-Year Performance: 59.15%
Tower Semiconductor is entering “the strongest growth phase in our history,” Chief Executive Officer Russell Ellwanger said as it guided fourth-quarter revenue to $600 million, up 36% year over year. Tower runs factories that make specialty chips, and its silicon photonics process, which turns electrical signals into light for AI data centers, is where its growth is concentrated.
Ellwanger said demand for silicon photonics and silicon germanium chips is driving exceptional growth in its high-speed connectivity business. Tower is targeting an annualized silicon photonics revenue run rate of $1.1 billion in the fourth quarter, which he put at five times the business’s full-year revenue in 2025. He added that all tools for its 300-millimeter expansion in Japan have been ordered and scheduled, with full production starts targeted for the third quarter of 2027. Management expects fourth-quarter revenue to bring full-year 2026 sales to about $2 billion.
Profit is rising faster than sales. Third-quarter revenue grew 33% from a year earlier, while gross profit nearly doubled to $179 million from $93 million. Our look at whether Tower can ride the AI optical interconnect wave examines how far that opportunity could reach.
8. Ciena (NYSE:CIEN)
Average Upside Potential: 75%
Market Cap: $42.11 billion
1-Year Performance: 52.89%
Fiscal 2026 revenue is now expected to reach $6.42 billion, plus or minus $50 million, after Ciena raised its forecast following a record quarter. Ciena builds the optical networking equipment that carries data across long distances, and AI data centers are driving a growing share of its sales. Two customers each accounted for more than 10% of third-quarter sales.
Revenue in the fiscal third quarter was a record $1.67 billion, up 37% from a year earlier. Profit grew much faster. Adjusted operating margin reached 22.5%, compared with 10.7% a year earlier, and adjusted earnings per share rose 215%, so Ciena is keeping more of each sales dollar as volume climbs.
Chief Executive Officer Gary Smith said AI keeps driving waves of network investment and that Ciena’s incumbency, technology and expertise give it a competitive edge. Chief Financial Officer Marc Graff said expanding supply capacity and rising operating leverage should help earnings keep accelerating in the quarters ahead. For a closer look at how the order book squares with the stock’s price, see our analysis of whether Ciena’s backlog justifies its premium.
7. DigitalOcean (NYSE:DOCN)
Average Upside Potential: 77%
Market Cap: $10.62 billion
1-Year Performance: 99.25%
DigitalOcean, a cloud company for developers and AI start-ups, is growing faster than it has in a decade. Third-quarter revenue rose 40% to $321 million, the fifth quarter in a row of faster growth. Annual recurring revenue from AI customers jumped 288% to $376 million.
Chief Executive Officer Paddy Srinivasan said big customers are adopting the whole platform instead of just renting computing power. He said usage of its inference tools, which run trained AI models, grew roughly tenfold from the previous quarter. He added that agents, the AI programs that do tasks on their own, need a different kind of cloud.
Management raised its outlook again. It now expects fourth-quarter revenue growth of 44% to 45%, and growth of more than 60% for full year 2027. The company also said it brought its 2026 capacity online on or ahead of schedule and secured more data center power for 2028. It plans to give detailed 2027 margin and cash flow guidance alongside its fourth-quarter results. A recent debt-funded expansion is the subject of our piece on DigitalOcean’s $725 million bet on AI.
6. Semtech (NASDAQ:SMTC)
Average Upside Potential: 77%
Market Cap: $11.29 billion
1-Year Performance: 79.01%
Semtech makes chips for AI data center networking and for connected devices, and its backlog is at a record. Net sales hit a record $341.9 million in the fiscal second quarter, up 33% from a year earlier. Its adjusted operating margin rose to 24.4% from 18.8% a year ago, so profit grew faster than sales.
Chief Executive Officer Hong Hou said bookings are accelerating and backlog is at a record. He pointed to a strong inflection in growth, with new sources of revenue and visibility that extend well into next fiscal year. He also cited progress in streamlining the product portfolio. Chief Financial Officer Mark Lin said the company turned record sales and wider margins into strong cash flow.
Guidance shows the step up. Semtech expects third-quarter net sales of $410.0 million, plus or minus $5.0 million, and adjusted earnings of $1.05 per share, compared with $0.71 in the second quarter. Management said it enters the third quarter expecting broad-based bookings strength to turn into steady growth in revenue, margin and earnings. Its wireless side is the focus of our look at how a security partnership could lift Semtech’s AirLink line.
5. Marvell Technology (NASDAQ:MRVL)
Average Upside Potential: 90%
Market Cap: $145.26 billion
1-Year Performance: 89.27%
Marvell sells the chips that link, switch and customize the computing inside AI data centers, and its growth is speeding up now. Revenue hit a record $2.739 billion in the fiscal second quarter, up 37% from a year earlier. Revenue from its data center business grew 46%.
Chairman and Chief Executive Officer Matt Murphy said AI-related bookings remain exceptionally strong and that he expects revenue growth to accelerate through the rest of fiscal 2027. For the fiscal third quarter, Marvell guided to revenue of $3.150 billion, plus or minus 5%.
Murphy is also making a bigger move. Marvell agreed to acquire an optical components maker in an all-stock deal, which the companies say will lift the combined company’s addressable market to $550 billion. They expect it to add to Marvell’s non-GAAP earnings per share in the first year after closing. Murphy called it a once-in-a-generation shift toward optical connectivity and will stay on as chairman and chief executive. You can see the other side of the debate in our look at what the few analysts without a buy rating see.
4. Seagate Technology Holdings (NASDAQ:STX)
Average Upside Potential: 94%
Market Cap: $125.40 billion
1-Year Performance: 108.06%
Seagate has cut its gross debt to $1.6 billion from $3.6 billion since its fiscal year ended, while hard drive demand from cloud companies keeps climbing. Revenue was $4.233 billion in the fiscal first quarter, against $2.629 billion a year earlier, and gross margin reached a record on a GAAP basis.
Chair and Chief Executive Officer Dave Mosley said the quarter brought record profitability and its highest free cash flow ever for a September quarter. That cash is going to debt first. Seagate retired about $1.2 billion of principal in the quarter and another $750 million after it ended. It still returned money to shareholders through dividends and buybacks, and it declared a quarterly dividend of $0.76 per share.
The next quarter looks stronger. Seagate guided to revenue of $4.8 billion, plus or minus $100 million, and non-GAAP earnings of $9.20 per share, plus or minus $0.20. Chief Financial Officer Gianluca Romano said he expects operating margin to move toward the mid-50% range. That turnaround is the story in our look at how Seagate tripled by selling a technology many had written off.
3. Western Digital (NASDAQ:WDC)
Average Upside Potential: 99%
Market Cap: $116.50 billion
1-Year Performance: 98.04%
Western Digital raised its dividend after a quarter in which earnings per share rose 161%. Revenue was $4.38 billion in the fiscal first quarter, up 55% from a year earlier. Gross and operating margins both widened, which is how earnings grew so much faster than sales.
Chief Executive Officer Irving Tan said the year is off to a strong start, with results ahead of expectations on strong customer demand and steady execution. He added that Western Digital is deepening customer relationships, reaching new parts of the market and gaining visibility into future demand. The board lifted the quarterly dividend 17% to $0.175 per share, and the company produced strong free cash flow in the quarter.
Management expects the pace to hold. It guided to fiscal second-quarter revenue of $5.1 billion, plus or minus $100 million, which would be up 66% to 72% from a year earlier. Chief Financial Officer Kris Sennesael tied the results to growth in exabytes shipped and better pricing. Readers weighing the stock can see a valuation view in our assessment of whether Western Digital is a good investment at its price.
2. Micron Technology (NASDAQ:MU)
Average Upside Potential: 103%
Market Cap: $906.30 billion
1-Year Performance: 238.06%
Micron closed fiscal 2026 with revenue of $133.19 billion, against $37.38 billion the year before. Fourth-quarter revenue alone was $54.23 billion, compared with $11.32 billion in the same quarter a year earlier. Operating cash flow grew sharply as well, and the company said strong AI-driven demand shaped the quarter. Micron also said its server memory modules have passed several customer qualifications, and that its newest solid-state drives for AI workloads are now shipping to leading customers.
Chairman and Chief Executive Officer Sanjay Mehrotra said that Micron “delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027.” The company backed that up with fiscal first-quarter revenue guidance of $61.5 billion, plus or minus $1.5 billion, and said it expects revenue to grow every quarter.
The balance sheet gives it room to keep investing. Micron ended the year with $73.48 billion in cash, marketable investments and restricted cash, and it kept paying a quarterly dividend. Why the stock trades at such a low multiple is the subject of our analysis of what Wall Street may be missing about Micron.
1. Sandisk (NASDAQ:SNDK)
Average Upside Potential: 131%
Market Cap: $133.48 billion
1-Year Performance: 285.14%
Sandisk made $11.0 billion in revenue in the fiscal first quarter, up 23% from the quarter before. It earned far more than a year earlier, and its profit margins stayed very high. The company makes flash memory used in everything from phones to the enterprise drives that store data for AI.
Chairman and Chief Executive Officer David Goeckeler said demand for its products is strong and growing, and that its data center business grew faster than the rest of the company. Management guided to fiscal second-quarter revenue of $12.2 billion to $12.6 billion, a step up from the quarter just reported, and it expects margins to stay near current levels.
Sandisk is also returning cash. It spent $5.0 billion to buy back shares in the quarter, and over two quarters it has repurchased a meaningful share of its stock. The company announced an 8-for-1 stock split as well, with split-adjusted trading expected to begin next week. The per-share figures in its guidance are shown before the split. Whether the profit surge can last is the question in our analysis of Sandisk at six times forward earnings.
READ NEXT: Sandisk (SNDK) Is Up 1,322% in a Year: Is There Still Room to Run? and Micron (MU) vs. Sandisk (SNDK): Is the Smaller Factory Bill Really an Advantage?
