Who will make money on the AI boom in the long run: TipRanks names three Wall Street favorites
Leading analysts suggest investors looking to capitalize on the AI boom should bet on three stocks: Broadcom, Zscaler and Oracle. According to TipRanks, a platform that assesses the accuracy of Wall Street forecasts, these companies are well positioned to capitalize on AI-related growth over the long horizon. They have already proven the resilience of their business models and have received a strong boost from the growing demand for artificial intelligence. The latest reporting season has shown: it's not about temporary hype, but about building stable revenue streams, CNBC writes .
Broadcom
Semiconductor maker Broadcom reported strong results for the third quarter of fiscal 2025 and an optimistic outlook for 2026. The management was buoyed by the growing demand for AI solutions, as well as the success of VMware's cloud computing and virtualization business. Broadcom acquired it in 2023.
The company recorded an 18 percent increase in AI revenue growth and forecasts a further increase of nearly 19 percent in the current quarter to $6.2 billion, putting it on track for $20 billion in AI revenue by the end of 2025.
After the publication of the reports, several Wall Street analysts raised their target prices on Broadcom shares, including Harlan Suhr from JPMorgan. He reiterated his recommendation to buy these securities and raised their target from $325 to $400. According to Suhr, the company is winning on several fronts at once: demand for AI chips is growing, the traditional semiconductor segment is stabilizing, and VMware services are showing good dynamics. The analyst reminds that the new major customer of Broadcom may be OpenAI, and assumes that by 2026 the revenue from AI may grow to $45 billion.
Zscaler
Zscaler, a cybersecurity services company, also posted strong results. Demand for Zero Trust solutions - a cloud-based service that operates on a "zero trust" model - and interest in AI security helped it significantly improve its performance in the fourth quarter of fiscal 2025, CNBC points out.
Stifel analyst Adam Borg noted after the publication of the report that Zscaler has exceeded expectations on key indicators, and especially emphasized the growth of contracted liabilities volumes (RPO) by 31% year-on-year - this figure has increased for the fourth quarter in a row. According to Borg, the company is successfully executing its strategy and expanding the Zero Trust portfolio, and is optimistic about the launch of the Z-Flex program - a flexible model that allows clients to gradually connect additional products and services. According to Stifel analysts, these initiatives, along with new AI solutions, will help the company maintain high growth rates and continue to expand margins.
It reiterated a buy recommendation on Zscaler stock and raised its target price to $330 from $295. TipRanks gives a more cautious assessment - neutral rating with a $298 target.
Oracle
Another favorite of analysts, according to TipRanks, was Oracle. Despite weak Q1 results, the company's shares rose sharply thanks to strong outlook for its cloud business. The main sensation was the sharp rise in contracted revenue (RPO), which jumped 359% year-over-year to $455 billion.
Jefferies analyst Brent Till said it was RPO that was the "star of the quarter," nearly five times its full-year revenue guidance for fiscal 2026. This boosted investor confidence that the company will be able to turn the hype around AI into real revenue. The growth is backed by multi-billion-dollar contracts with major customers, and RPO could exceed $500 billion in the long run, Till said.
Oracle is also betting on the development of cloud infrastructure, whose volume is expected to increase by 77% by 2026 and reach $144 billion by 2030. In parallel, the company is actively developing multi-cloud solutions and plans to expand its network of data centers to 71.
Till maintained a buy recommendation on Oracle and raised his target price to $360 from $270. TipRanks rates these shares as "market outperform" with a $264 target.
This article was AI-translated and verified by a human editor
