It’s been a wild year for artificial intelligence (AI) stocks. Technology continues to evolve and shows how impactful it can be. Still, investors are somewhat concerned about the significant capital expenditures these companies have made to build out AI infrastructure. AI companies, even the big ones in the “Magnificent Seven,” have taken on debt to finance the expansions, and investors don’t know if the returns will justify the costs.
That said, most Wall Street analysts believe much of the sell-off is overdone and that they see opportunity. Here are two AI stocks that Wall Street analysts think could rise 47% and 54% based on consensus estimates.
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Microsoft
It’s hard to imagine a company having something like this Microsoft (MSFT 1.57%)with all the trimmings, could see such a big sell-off in recent months. Not only does the company operate a strong, diverse technology conglomerate without AI, but Microsoft is expected to be one of the biggest beneficiaries of what some are calling the Fourth Industrial Revolution.
However, shares have stalled as Microsoft has already spent more than $72 billion in capital expenditures (capex) in the first half of its 2026 fiscal year, which ends in June. Capital expenditure has been higher than expected and most of it has been on AI infrastructure such as graphics processing units (GPUs) and data centers.
Additionally, investors seem somewhat disappointed with Microsoft Copilot, the company’s AI chatbot and assistant that is a big part of its AI strategy. The company revealed during its most recent earnings call that Copilot has 15 million paid members. That’s a small percentage of total Microsoft 365 subscribers and a far cry from what the big AI chatbots like ChatGPT or Claude have, though Microsoft may not see Copilot as a direct competitor.
Despite the problems, Wall Street analysts see the stock as a strong buy. Of the 33 Wall Street analysts who have issued research reports on the company in the past three months, 30 have a buy rating, while three have a hold rating, according to TipRanks. The average price target implies an upside of approximately 47% from current levels.
Today’s change
(-1.57%)$-6.32
Current price
$395.54
Key data points
Market capitalization
$2.9 tons
Day range
$394.24 -$404.80
Range of 52 weeks
$344.79 -$555.45
Volume
1.4 million
Avg. full
34M
Gross margin
68.59%
Dividend yield
0.88%
Jefferies Analyst Brent Thill recently reiterated his buy rating on the stock with a price target of $675, implying an upside of 66%. Thill sees Microsoft’s end-to-end platform, which includes its 450 million Microsoft 365 subscribers and the Azure cloud, as a key advantage. The analyst also expects the stock to trade at around 21 times expected fiscal 2027 earnings per share, which is not an expensive valuation historically.
While Microsoft’s Copilot growth has been somewhat disappointing thus far, it could also ultimately be a source of future upside if it starts to take off. I also believe that the company’s well-diversified businesses somewhat insulate it from a pure bet on AI.
Oracle
The cloud provider Oracle (ORCL 2.60%) has seen its stock fluctuate wildly over the past six months. After a blockbuster earnings report in September, in which the company reported more than $450 billion in remaining performance obligations, representing contracted revenue expected to be collected in future periods, the company’s shares exploded higher.
Oracle had burst onto the scene as an AI data center player. However, the rally was short-lived as it became clear that a large portion of RPOs were coming from OpenAI, which seemed to be striking AI data center deals with everyone. Oracle also had to take on significant debt to finance the buildout of these data centers, and investors were concerned about margins in this sector.
Today’s change
(-2.60%)$-4.13
Current price
$155.03
Key data points
Market capitalization
$446 billion
Day range
$154.15 -$160.77
Range of 52 weeks
$118.86 -$345.72
Volume
1.1 million
Avg. full
29M
Gross margin
64:30%
Dividend yield
1.29%
In Oracle’s most recent earnings report, the company surpassed Wall Street consensus estimates and raised fiscal 2027 revenue guidance by $1 billion. Oracle also reported strong cloud revenues and a large backlog, somewhat easing investor concerns.
Of the 32 analysts who have issued a research report in the past three months, 28 have a buy rating and four say hold. The average price target implies an upside of 54%, according to TipRanks.
Deutsche Bank Analyst Brad Zelnick recently reiterated his buy rating on the stock, while lowering his price target from $375 to $300 per share. However, that still implies significant upside, with shares trading around $166 per share at the time of writing. Zelnick is encouraged by the company’s unsecured bond offering in February, which received an investment-grade rating, and by OpenAI’s recent $110 billion private funding round.
I think it’s hard to say what will happen with AI at this point. Will it continue to accelerate as it has, or is some kind of pause inevitable? Clearly, if OpenAI can fulfill its contract with Oracle, its shares should soar. With Oracle’s shares down 46% over the past six months and the stock now trading at around 22 times forward earnings, the risk-reward proposition has improved significantly.
I think investors can at least take a smaller position because the upside could be huge.
