Artificial intelligence (AI) stocks have been in fine form on the market in the past few years, and that's not surprising, as this technology has supercharged the growth of many companies.
Thanks to huge investments in AI hardware such as semiconductors, as well as the rapidly growing adoption of AI software to boost productivity, it is estimated that overall spending on AI could hit a massive $628 billion by 2028. This explains why investors have been buying AI stocks hand over fist. However, there are certain AI stocks that have significantly outpaced the broader stock market, and importantly, they still have the potential to deliver more upside.
Let's take a closer look at these two names that aren't all that popular, but have been outperforming the market in the past year.
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1. Twilio
Twilio (TWLO 0.03%) stock is up an impressive 115% in the past year as of this writing, easily outperforming the 11% gains clocked by the Nasdaq Composite over the same period. The good part is that Twilio still trades at an attractive 26 times forward earnings and 4 times sales, even after its terrific surge in the past year.
The valuation makes buying Twilio stock a no-brainer right now, especially considering how AI now plays an important role in accelerating its growth. Twilio's application programming interfaces (APIs) allow its clients to connect with their customers through various channels such as voice, text, email, video, chat, and others.
Twilio points out that its customer engagement platform is used by more than 300,000 enterprises globally. Specifically, the company ended the first quarter of 2025 with more than 335,000 active customer accounts, an increase of 7% from the previous year. This huge customer base is a key reason why one can consider buying Twilio stock right now, as it gives the company the opportunity to cross-sell its AI offerings to a big pool of customers.
Twilio has been offering multiple AI tools to customers, such as generative AI-powered assistants that can help tackle customer service queries autonomously, integrating human-like conversational AI assistants to talk to customers in real time and derive critical insights from customers' data with the help of AI. The growing demand for these AI services helps Twilio win more business from existing customers.
This is evident from the five-percentage-point jump in fiscal 2025 Q1's dollar-based net expansion rate compared to the first quarter of 2024. The higher customer spending, along with an increase in Twilio's customer base, are the reasons why it has raised its full-year organic revenue growth guidance to 8% from the earlier forecast of 7.5%.
This combination of higher customer spending, along with an increase in the customer count, explains why analysts expect a 24% increase in Twilio's earnings this year, followed by impressive growth over the next couple of years as well.
Data by YCharts.
Assuming Twilio indeed generates $6.21 per share in earnings after a couple of years and trades at 30 times earnings at that time (in line with the tech-laden Nasdaq-100 index's forward earnings multiple), its stock price could jump to $186. That would be a 59% jump from current levels. So, investors can expect more upside from this AI stock going forward, which is why it would be a smart idea to consider buying it while it trades at attractive levels.
2. Snowflake
Snowflake (SNOW 1.34%) share prices have jumped an impressive 64% in the past year despite bouts of volatility, and a closer look at the price chart will tell us that the stock has made a sharp move up in the past couple of months.
Importantly, more upside in Snowflake stock cannot be ruled out, as fast-growing adoption of the company's AI-focused data cloud tools is helping it build a robust revenue pipeline for the future. Snowflake's data cloud platform enables customers to safely store their data in a single platform, which can then be used to derive insights and build applications.
The company's AI-specific tools are now helping customers get more out of their data. They can apply large language models (LLMs) to their data to build applications such as AI agents, generative AI assistants, and search documents through natural language prompts, among other things. These offerings are turning out to be a hit among Snowflake customers, with nearly 45% of its 11,600-strong customer base using its AI tools every week in the previous quarter.
Additionally, AI is helping Snowflake attract more customers. This is evident from the 19% year-over-year increase in its customer count in Q1 of fiscal 2026. This combination of an increase in Snowflake's customer base, along with the growing adoption of its AI tools, is the reason why its remaining performance obligations (RPO) increased by an impressive 34% year over year in the previous quarter to $6.7 billion, which was better than the 26% growth in its product revenue to just under $1 billion.
The strong growth in its revenue pipeline encouraged management to increase its fiscal 2026 revenue guidance as well. What's more, Snowflake's earnings are expected to increase by a third in the current fiscal year to $1.10 per share. Consensus estimates project faster growth over the next couple of fiscal years.
Data by YCharts.
That won't be surprising, as Snowflake's ability to win more business from its existing customers and an improvement in its overall customer count should allow it to continue improving its revenue pipeline, especially considering that it sees its total addressable market growing to a whopping $342 billion in 2028.
In all, Snowflake investors can expect more upside from this cloud stock following the impressive gains that it has delivered in the past year, driven by a new catalyst in the form of AI.
