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The artificial intelligence (AI) data center market has seen massive growth in 2024, driven by the rise of generative AI, advances in powerful computing, and the shift to modular and energy-efficient systems. This boom is changing the tech space and opening big opportunities for companies leading the way in AI and data center development.
For example, Crusoe Energy Systems, a startup focused on clean energy-powered AI data centers, raised $600 million in December 2024, placing its valuation at $2.8 billion. Its new facilities, designed to handle up to 100,000 GPUs, highlight just how much computing power AI needs.
McKinsey predicts that demand for AI-ready data centers will grow by about 22% annually through 2030, potentially creating a supply gap if infrastructure doesn’t expand fast enough. Major players like NVIDIA (NVDA), Dell (DELL), Broadcom (AVGO), Credo (CRDO), and Micron (MU) are well-positioned to benefit from these trends.
Analysts at Mizuho Securities have pointed out how modular data centers can help meet the energy demands of generative AI, and named these companies as leaders in this fast-growing space. Looking ahead to 2025, it’s clear that investing in these innovators could pay off as they shape the future of AI-driven infrastructure. Let’s take a closer look at what makes these five stocks stand out.
#1. NVIDIA Corporation (NVDA)
NVIDIA (NVDA), known as the pioneer of GPU technology, has grown from a company focused on gaming graphics to a major player in AI and data center computing. Its business revolves around designing and producing advanced GPUs, with its data center segment now bringing in most of its revenue through AI chips and computing solutions.
In 2024, NVIDIA’s stock has had an incredible run, racking up a 173% gain for the year.
The company reported record-breaking Q3 FY2025 revenue of $35.1 billion, up 94% from the previous year and beating analysts’ expectations of $33.2 billion. Its data center segment contributed $30.8 billion, an impressive 112% jump year-over-year, driven by high demand for AI GPUs like Hopper and excitement for its upcoming Blackwell chips.
For Q4 FY2025, NVIDIA expects revenue to hit $37.5 billion (±2%), with strong gross margins of about 73%, signaling continued demand for its AI solutions.
Analysts are very optimistic about NVIDIA’s future, with a consensus “Strong Buy” rating. Out of 43 analysts, 36 rate NVDA stock a “Strong Buy,” 3 recommend a “Moderate Buy,” and 4 suggest a “Hold.” The average price target is $174.95, which points to a significant upside of 30.5% from its current price.
#2. Dell Technologies Inc. (DELL)
Dell Technologies (DELL) is a global leader in tech, offering everything from PCs and servers to storage systems and cloud solutions, with a growing focus on AI-driven infrastructure and data center solutions.
In 2024, DELL stock has had a milestone year, gaining 54% and landing an invite to re-join the S&P 500 Index ($SPX).
Dell’s financial results back up its position as a top AI data center stock for 2025. In Q3 FY25, the company reported $24.4 billion in revenue, up 10% from last year. Its Infrastructure Solutions Group (ISG) led the way, with revenue jumping 34% to $11.4 billion and servers and networking sales surging 58% to $7.4 billion, thanks to strong demand for AI-ready infrastructure. Earnings per share also grew nicely, with diluted EPS up 16% to $1.58 and non-GAAP EPS rising 14% to $2.15.
Analysts are optimistic about Dell’s future in AI, with 15 out of 20 analysts rating it a "Strong Buy," two recommending a "Moderate Buy," and three suggesting a “Hold.” The average price target of $149.42 points to a potential upside of about 27.8% from current levels.
#3. Broadcom Inc. (AVGO)
Broadcom Inc. (AVGO) is a top player in the semiconductor and software space, known for making custom AI chips, networking tools, and enterprise software. The company works with cloud providers, hyperscalers, and businesses to deliver advanced tech solutions.
In 2024, Broadcom’s stock had an incredible run, jumping more than 100% to set an all-time high. Recent gains have been particularly impressive, with a 26% rally in the past week pushing AVGO's market cap past $1 trillion, driven by a positive earnings reaction.
In Q4 FY24, Broadcom reported $14.05 billion in revenue, up 51% from the previous year, fueled by a massive 220% increase in AI-related revenue to $12.2 billion for the fiscal year. Semiconductor revenue hit $30.1 billion (+12% YoY), while infrastructure software revenue soared 196% to $5.8 billion.
Looking ahead, Broadcom expects Q1 FY25 revenue of about $14.6 billion (+22% YoY), signaling continued strong growth.
Analysts are overwhelmingly positive about Broadcom’s future, giving the stock a “Strong Buy” rating on average. Of 33 analysts in coverage, 30 recommend a "Strong Buy," while three suggest holding. The average price target is $217.31, but with the stock currently trading at $229, AVGO is already well above this forecast.
#4. Credo Technology Group Holding Ltd (CRDO)
Credo Technology (CRDO) focuses on creating high-speed connectivity solutions for data centers and telecom networks, with a strong emphasis on AI infrastructure. Its innovative Active Electrical Cables (AECs) are a game-changer, making them perfect for energy-hungry AI data centers.
The stock has had an incredible year, skyrocketing 263% since the start of 2024. In just the past month, CRDO has gained more than 74%.
In Q2 FY25, Credo reported strong results, with revenue up 63.6% year-over-year to $72 million and a solid non-GAAP gross margin of 63.6%. The company posted adjusted net income of $12.3 million, or $0.07 per share, showing it’s running efficiently despite GAAP losses. For Q3 FY25, Credo expects revenue between $115 million and $125 million—a potential 67% jump—driven by increasing AI adoption.
Analysts rate CRDO stock a “Strong Buy” overall, with 8 "Strong Buy" ratings and just 1 “moderate buy” recommendation. The average price target is $74.44, a premium of about 9% to current prices.
#5. Micron Technology, Inc. (MU)
Micron Technology (MU) is a leader in memory and storage products, making DRAM, NAND, and NOR memory that are essential for AI infrastructure. Its offerings, like high-bandwidth memory and PCIe Gen6 SSDs, make it a key supplier for powering AI data centers.
In 2024, Micron’s stock has showed solid growth, up 27.8%. While the shares have corrected 30% from their June high of $157.54, MU stock has still gained 33% over the past year. Recently, it’s been picking up steam again, with an 11.8% gain over the past month.
Micron reported a strong finish to fiscal Q4 2024, reporting $7.75 billion in revenue—up 93% from last year—thanks to record sales of data center DRAM and NAND products. Non-GAAP net income hit $1.34 billion ($1.18 per share), and operating cash flow jumped to $3.41 billion, sharply higher than just $249 million a year ago. Looking ahead to fiscal 2025, Micron expects quarterly revenue of $8.7 billion (+22% YoY) with gross margins around 39.5%, reflecting growing demand for its AI-driven solutions.
Investors should stay tuned to Micron's upcoming earnings report, set for release after tonight's closing bell.
Analysts are optimistic about Micron’s future, with 25 rating it a “Strong Buy,” 2 recommending a “Moderate Buy,” 1 suggesting a “Hold,” and 1 issuing a “Strong Sell” - all amounting to a consensus “Strong Buy” rating. The average price target of $149.37 suggests a potential upside of 38.3%.
Conclusion
In conclusion, the AI revolution is reshaping industries, and these five stocks—NVIDIA, Dell, Broadcom, Credo, and Micron—are at the forefront of powering this transformation through cutting-edge data center technologies. With strong financial performances, impressive stock growth, and bullish analyst ratings, these stocks offer compelling opportunities for investors looking to add data center exposure into 2025 and beyond.
