Top Wall Street analysts see robust growth potential in these 3 stocks

The latest earnings season eased concerns about a potential AI bubble. Rising spending by hyperscalers and other companies has strengthened confidence in the demand for AI infrastructure and software solutions.

Investors looking to capitalize on the AI ​​boom can follow the advice of top Wall Street analysts, who provide key insight into a company’s ability to capture AI-driven demand despite macro uncertainties and increased competition.

Here are three stocks favored by some of Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Datadog

AI-powered observability and security platform Datadog (DDOG) is this week’s first pick. In early May, the company impressed investors with its first-quarter results and strong outlook, well above the market.

Following an investor webinar with Vikram Thaker, senior director of North America business at global consultancy Cognizant, Bank of America analyst Koji Ikeda reiterated his buy rating on Datadog shares. price target $260 Prices starting from $225. The analyst said after the webinar that he was more bullish on Datadog and demand for “best-of-breed infrastructure software vendors.” JFrog. He believes these two companies have the ability to exceed Bank of America and the Street’s forecasts.

Ikeda added that as businesses move to the cloud and AI, the demand for high-quality observability and security platforms like Datadog will increase, making everything more complex. As a result, he expects the momentum in Datadog’s performance to continue.

The five-star analyst emphasized that Datadog achieved results well above expectations in the first quarter. Additionally, the outlook for second-quarter revenue growth above 30% reinforced Ikeda’s confidence in DDOG’s potential to deliver further acceleration in growth. He emphasized that recent major AI-related deals prove Datadog’s mission-critical positioning and strong AI-led tailwinds.

“Execution remains world-class, with improvement in demand trends supporting further strike-and-raise potential,” Ikeda said.

Ikeda is ranked 867th out of more than 12,200 analysts followed by TipRanks. Their ratings were profitable 55% of the time, generating an average return of 10.4%. See Datadog Hedge Funds Activity on TipRanks.

Micron Technology

Micron Technology (MU) The stock is on a solid rise this year thanks to higher pricing driven by unprecedented memory demand and supply challenges fueled by the ongoing AI boom. Despite the impressive rise in MU shares, UBS analyst Timothy Arcuri has significantly increased the stock price. price target $1,625 He reaffirmed his buy rating, with prices starting at $535.

“We believe the market will begin to place a more ‘normal’ multiple on the stock and will continue to re-rate MU as more details emerge about the structural changes AI is causing to the entire memory complex,” Arcuri said.

Notably, the five-star analyst once again raised his 2027 calendar year earnings per share estimates to 2029, citing the traction of long-term deals in the memory industry. Arcuri emphasized that these new LTAs are longer term, contain fixed volume commitments and have a partially fixed pricing structure. These are in stark contrast to previous purchase agreements that were purely volume-based.

Additionally, Arcuri’s supply chain checks on industry-wide LTAs indicate that up to 30% of dual data rate memory volumes could soon be secured at pricing only slightly below current levels. Such deals would allow Micron to trade some short-term revenues for strong demand visibility and a more stable earnings trajectory, the analyst explained.

Based on these LTAs, Arcuri expects Micron’s EPS to easily remain above $100 during 2027-2029 and expects the company to generate $400 billion in free cash flow during that period. Specifically, the analyst raised its 2027, 2028, and 2029 EPS estimates to $155, 167, and 117, respectively, from $133, 122, and 77.

Notably, Arcuri is ranked #2 among more than 12,200 analysts followed by TipRanks. Their ratings were profitable 81% of the time, with an average return of 56.6%. See Micron Ownership Structure on TipRanks.

Lam Research

Lam Research (LRCXThe company, which provides wafer manufacturing equipment and services to the semiconductor industry, was this week’s third stock pick. The AI-led surge in semiconductor manufacturing has increased demand for Lam Research and triggered a strong rally in its shares.

Top Mizuho analyst Vijay Rakesh said: Price target for LRCX stock It rose from $330 to $380 and reiterated its buy rating. The high price target reflects strengthening demand due to increased WFE spending.

Rakesh now expects WFE spending to rise 23% to $153 billion in 2026, with 2027 spending to rise 24% to $190 billion. In fact, these estimates are seeing an additional increase due to capital expenditures increasing on a yearly basis. Taiwan Semiconductor Manufacturingor TSMC; SAMSUNG; and Micron. Specifically, total memory WFE investment is projected to be approximately $112 billion this year.

“With higher revised 2026E/2027E WFE spending, we now see a significant increase in consensus estimates for LRCX, MKSI and AMAT, with LRCX potentially offering the most compelling bullish forecast as a consistently outperforming firm compared to WFE and peers,” Rakesh said.

Additionally, the five-star analyst expects the WFE market to continue to benefit from the acceleration of NAND node migrations, with Lam Research highlighting $40 billion in node migration spending. The majority of this investment is expected to occur before the end of 2027.

Rakesh also ranks high. He is ranked #4 out of more than 12,200 analysts followed by TipRanks. It did well in the ratings 74% of the time, with an average return of 79.2%. See Lam Research Statistics on TipRanks.