2 AI Stocks Predicted to Soar by Up to 115% by Wall Street Analysts

The advent of AI has helped fuel the market rally over the past year, but experts suggest it's only just begun. Palantir Technologies and Super Micro Computer are two AI-related stocks that could see significant growth, with select Wall Street analysts predicting up to 115% additional upside.

AI Market Overview

One of the biggest drivers of the market rebound over the past year has been the rapid and ongoing adoption of artificial intelligence (AI). Recent developments have marked a giant leap forward in the technology, promising to automate a great number of mundane tasks, thereby increasing productivity and saving money. Despite the recent retrenchment in AI stocks, most experts agree that we're still in the early stages of AI adoption, providing a compelling opportunity for savvy investors.

Palantir Technologies: Implied Upside of 85%

Palantir Technologies (PLTR) has successfully bridged the knowledge gap between AI and its users. The company has a history of developing AI tools for the U.S. government and its allies and has expanded its mandate to help businesses discover actionable intelligence from corporate data. This expertise allowed Palantir to quickly develop generative AI tools for business use, resulting in the Artificial Intelligence Platform (AIP), which provides practical solutions to everyday business problems.

To address the knowledge gap, Palantir hosts hands-on sessions called boot camps, pairing users with Palantir engineers to create solutions for company-specific problems. Since their inception late last year, 1,300 boot camps have been held, with 500 occurring in the past three months alone.

These efforts are driving robust results. In the first quarter, Palantir's U.S. commercial revenue jumped 40% year over year, while the segment's customer count soared 69%. The remaining deal value grew 74%, indicating continued growth.

Wedbush analyst Dan Ives is particularly bullish on Palantir, predicting the stock will reach $50 by 2025, representing an 85% upside from its recent closing price. Despite a high price-to-earnings ratio, Palantir's forward price/earnings-to-growth (PEG) ratio of 0.3 suggests it may be undervalued.

Super Micro Computer: Implied Upside of 115%

Super Micro Computer (SMCI), also known as Supermicro, provides the high-end servers necessary to power AI systems. As AI adoption accelerates, users are increasingly looking for energy-efficient solutions, an area where Supermicro excels. The company's building block architecture allows users to create systems tailored to their needs, offering various cooling technologies to fit different budgets.

During Supermicro's fiscal 2024 third quarter, revenue surged 200% year over year to $3.8 billion, while diluted earnings per share soared 329% to $6.56. The company is expanding its production capabilities to meet growing demand.

Loop Capital analyst Ananda Baruah has a high price target of $1,500 for Supermicro, representing a 115% upside from its recent closing price. Baruah is confident in Supermicro's leadership in the AI server industry and predicts the company will achieve a revenue run rate of $40 billion by the end of fiscal 2026. This is a significant increase from the $7.1 billion revenue delivered in fiscal 2023 and the projected $14.5 billion for fiscal 2024.

Baruah's bullish outlook is shared by other analysts, with 12 out of 17 rating the stock as a buy or strong buy in June, and none recommending selling. Supermicro stock is considered a bargain, currently selling for 1.4 times forward sales.

Conclusion

Palantir Technologies and Super Micro Computer are well-positioned to capitalize on the growing adoption of AI. With robust growth prospects and bullish analyst predictions, these stocks could provide significant returns for investors looking to tap into the AI market.