Investors shouldn't underestimate the power of momentum. And two kinds of stocks have plenty of momentum these days: mega-cap monsters with market caps of $200 billion or more and stocks with a major focus on artificial intelligence (AI).
But can the high-flying ways of these stocks continue? Many analysts would answer that question with a resounding "yes." Here are three mega-cap AI stocks Wall Street thinks will soar the most over the next 12 months.
1. Alibaba Group Holding
Wall Street is more bullish about Alibaba Group Holding Ltd. (BABA 1.49%) than any other AI stock. Alibaba's average 12-month price target reflects an upside potential of around 40%. Optimism about the Chinese e-commerce and cloud services leader isn't limited to just a few analysts, either. Of the 41 analysts surveyed by LSEG in January, 34 rate the stock as a "buy" or a "strong buy" with the remaining seven recommending holding Alibaba.
NYSE: BABA
Key Data Points
Alibaba's valuation ranks as a key factor behind Wall Street's favor. The stock trades below nine times forward earnings. Its price-to-earnings-to-growth (PEG) ratio of 0.57 based on five-year earnings growth projections is exceptionally attractive.
Many analysts seem to anticipate that Alibaba will be able to deliver stronger growth in the future. The company has expanded payment and logistics services on its popular Taobao and Tmall e-commerce platforms. Its cloud unit continues to deliver solid sales growth with a significant tailwind from AI.
I generally agree with Wall Street's upbeat view of Alibaba. But will its shares soar 40% over the next 12 months? I'm hesitant to go that far. I'd prefer to see evidence of the company's accelerating growth before becoming a full-blown cheerleader for this AI stock.
2. ASML Holding NV
ASML Holding NV's (ASML 2.39%) share price could vault 24% higher over the next 12 months if the consensus opinion on Wall Street is right. Sure, a handful of analysts aren't as positive about the semiconductor fabrication equipment company. One of the 39 analysts surveyed by LSEG in January had an "underperform" rating for ASML, while nine recommended holding the stock. However, the other 29 analysts rated it as a "buy" or a "strong buy."
NASDAQ: ASML
Key Data Points
Unlike Alibaba, ASML doesn't win Wall Street's support because of its compelling valuation. The stock trades at a forward earnings multiple of 30 and has a PEG ratio of 1.96. Those metrics reflect that ASML is priced at a premium.
Why do many analysts think the stock deserves its premium price tag? For one thing, ASML commands a market share of around 90% in supplying photolithography equipment used to make semiconductors. The continued surging demand for AI chips is another important factor behind Wall Street's optimism about this stock.
I'm on the same page as most analysts with this AI stock. My hunch is that ASML will reward investors' confidence with its fourth-quarter update on Wednesday of this week. A 24% gain over the next 12 months doesn't seem unreasonable to me.
3. Salesforce
Salesforce (CRM 0.43%) edges out Nvidia by a hair for the third spot among mega-cap AI stocks Wall Street thinks will soar the most over the next 12 months. And the two stocks could easily swap places with slight moves by either. The average price target for Salesforce reflects an upside potential of a little over 17% -- a fraction of a percentage greater than the potential estimated gain for Nvidia.
NYSE: CRM
Key Data Points
Why do analysts like Salesforce? It's probably not because of the customer relationship management (CRM) systems leader's current sales growth. Salesforce's revenue rose only 8% year over year in the third quarter of fiscal 2025, which ended Oct. 31, 2024. However, the company's earnings jumped roughly 25% higher.
Arguably the main reason for Wall Street's bullish take on Salesforce, though, is the potential for the company's Agentforce platform that uses AI agents. Increasing customer interest in Agentforce was a key factor behind TD Cowen's recent upgrade of the stock, according to media reports.
I won't be surprised if Salesforce hits Wall Street's consensus price target over the next 12 months. The newest version of Agentforce introduced last month could be just the spark this stock needs to extend its rebound after a moderate pullback.
