The role of the technology sector in the global economy is expanding rapidly. According to the researcher Gartner, global spending on information technology (IT) is estimated to reach $5.43 trillion in 2025.
The rapid adoption of artificial intelligence (AI) worldwide is expected to drive a significant portion of this spending. The tech-heavy Nasdaq-100 index is up almost 17% so far, driven mainly by AI-powered giants.
Several technology leaders are building a competitive moat in areas like semiconductors and cloud computing. In case you have $5,000 not required to pay bills or for contingencies, then investing in one or both of these stocks can pay rich returns in the long run.
1. Oracle
Over the last few years, Oracle (ORCL -0.89%) has evolved from a database specialist to a leading AI-driven cloud infrastructure company. The company's cloud infrastructure is now powering complex AI workloads for several prominent companies, including OpenAI, Meta Platforms, Nvidia, and Advanced Micro Devices. Its large-scale data centers are proving faster and cheaper for training huge AI models.
And by being the largest custodian of high-value private data globally, Oracle is also well positioned to capitalize on the growing opportunity in AI inference (real-time deployment of AI models). The company uses vectorization to store huge amounts of data in its AI databases, which all prominent large language models easily understand.
And by enabling the connection of all of its clients' data sources with large language models inside the cloud, Oracle allows clients to leverage advanced AI reasoning without compromising on the safety and security of their private data.
Cloud infrastructure revenue surged 54% year over year to $3.3 billion in the first quarter of fiscal 2026 (ending Aug. 31). Management now expects the business to see revenue soar 77% year over year to $18 billion in fiscal 2026 and scale up rapidly toward $32 billion by 2027.
These are achievable targets, especially after the company signed a $300 billion contract with OpenAI for providing computing capacity over the next five years. Oracle's $455 billion backlog at the end of the first quarter will continue to drive up its overall revenue for the next few years.
The stock is trading at 41.5 times forward earnings, which is not a particularly cheap valuation. And it carries a huge $91.3 billion debt, which will increase due to its $18 billion bond issuance in September 2025. However, with demand for Oracle's cloud services far outpacing supply and its crucial role as an AI infrastructure provider, the company can continue to grow its share price despite the headwinds.
2. Micron
Micron Technology (MU 2.28%) is a crucial supplier of memory and storage for building global AI infrastructure. In the fourth quarter of fiscal 2025 (ending Aug. 28), the company's revenue soared 46% year over year to $11.3 billion, while adjusted earnings per share surged 156.8% year over year to $3.03. The company's revenue also jumped 49% year over year to $37.4 billion, and gross margins rose by 17 percentage points to 41% in fiscal 2025.
Micron's data center segment has been the key growth catalyst, accounting for 56% of total revenue and a gross margin of 52% in fiscal 2025.
A major contributor to this growth was the company's high-bandwidth memory (HBM) products and advanced DRAM offerings, which together generated $10 billion in revenue in fiscal 2025. HBM revenue alone reached $2 billion in the fourth quarter, translating into an annual run rate of almost $8 billion.
Demand is especially robust for the HBM third-generation extended (HBM3E) products, because its faster data movement and lower latency are crucial for AI workloads. The company has already secured pricing agreements for the majority of its HBM3E supply for most of the calendar year 2026.
HBM's share is expected to be in line with DRAM's market share in the third quarter of calendar year 2025. These factors highlight the strong demand and revenue visibility for the HBM in the coming months.
And the company has begun sampling the even faster and power-efficient fourth-generation high-bandwidth memory (HBM4) products. Micron is in position to benefit from the next wave of AI-driven demand.
It expects the supply of DRAM and NAND to fall short of demand in calendar year 2025. Besides AI servers, demand for memory and storage has also increased in PCs, smartphones, and automobiles. This mismatch is expected to strengthen prices, which in turn will help boost the company's revenue and margin.
Management has also provided strong guidance for the first quarter of fiscal 2026, which includes $12.2 billion to $12.8 billion in revenue, 50.5% to 52.5% gross margin, and $3.60 to $3.80 in adjusted earnings per share.
Despite these secular tailwinds and robust financials, the stock trades at 10.5 times forward earnings, significantly lower than the valuation multiples of many top-notch AI infrastructure players.
Hence, with Wall Street still valuing the company mostly like a cyclical memory player, it can be a brilliant pick in 2025.
