NVIDIA Powers AI Growth While Oracle Secures OpenAI Contracts

The artificial intelligence sector continues to drive significant activity across various industries, with major tech players and specialized firms making strategic moves and seeing substantial market shifts. NVIDIA, Microsoft, and Alphabet are consistently highlighted as top AI investment opportunities. NVIDIA's advanced GPUs remain crucial for data centers and AI model training, while Microsoft integrates AI across its Azure cloud and Microsoft 365 products, bolstered by its investment in OpenAI. Alphabet, through Google, leads in AI research and development, embedding AI into its search engine, Google Cloud, and projects like Waymo. Demand for AI infrastructure is fueling growth in hardware and data center sectors. Entegris, a provider of semiconductor production materials, saw its stock rise by 6.3% to US$89.56 due to early signs of AI infrastructure demand. Lattice Semiconductor's shares jumped 6% on excitement around its sensAI edge AI platform, and Astera Labs' stock increased, driven by its UALink technology for AI Infrastructure 2.0 and work with hyperscalers. Seagate Technology is experiencing increased demand for its HAMR-based Mozaic hard drives from AI-driven data centers, which offer higher storage capacity and improve profit margins. Data center expansion is a major theme, with Caterpillar planning a US$725 million expansion at its Lafayette, Indiana engine plant to meet the growing power demands from AI data centers. TeraWulf's shares surged after securing financing for AI data centers, notably backed by Google's $1.8 billion lease backstop. Digital Realty Trust, a data center REIT, is also positioned as a strong AI stock due to the surging demand for data center capacity. Pure Storage, recognized by Gartner, is gaining attention for its Enterprise Data Cloud architecture and partnerships with hyperscalers like Meta, which are expected to boost revenue from AI workloads. In the software and services arena, Oracle has secured $455 billion in AI data center contracts, including a $300 billion deal with OpenAI, with analysts predicting a 60% upside for its stock. ServiceNow is expanding its AI and security efforts by acquiring Armis for approximately US$7.75 billion in cash, making security its fifth business segment. Unity Software is gaining traction with its new machine learning model and strong Vector advertising business. Datavault AI's shares surged 42.6% after an analyst upgrade for its AI-powered data analytics platform. However, GitLab faces risks with its new hybrid pricing model for AI features, creating uncertainty about customer adoption. Oddity Tech is transforming the beauty industry with its AI-powered platform, achieving 90% accuracy in product matching using computer vision and generative AI. Meanwhile, HP warns of potential PC pricing pressure due to higher memory chip costs and inflation driven by AI data center growth. China's AI hardware sector is also thriving despite US chip limits, with Shanghai Biren Technology's Hong Kong debut raising HK$5.6 billion and Chinese developers focusing on software efficiency.

Key Takeaways

• NVIDIA, Microsoft, and Alphabet are consistently identified as top AI stocks, with NVIDIA's GPUs, Microsoft's Azure and OpenAI investment, and Alphabet's AI integration across search and Google Cloud driving their leadership.
• Oracle has secured $455 billion in AI data center contracts, including a $300 billion deal with OpenAI, with analysts projecting a 60% upside for its stock.
• TeraWulf's AI data center financing is supported by a $1.8 billion lease backstop from Google, contributing to its stock surge and estimated 40.6% undervaluation.
• Pure Storage is gaining attention for its Enterprise Data Cloud architecture and partnerships with hyperscalers like Meta, expecting increased revenue and margins from AI workloads.
• Caterpillar plans a US$725 million expansion at its Lafayette engine plant to meet the growing demand for power from AI-driven data center projects.
• ServiceNow is strengthening its AI and security offerings by acquiring Armis for approximately US$7.75 billion in cash, making security its fifth business segment.
• Lattice Semiconductor, Astera Labs, and Entegris are experiencing stock rallies due to demand for their AI chips, edge AI platforms, and semiconductor production materials, respectively.
• Seagate Technology is seeing increased demand for its HAMR-based Mozaic hard drives from AI-driven data centers, which offer higher storage capacity and improved profit margins.
• Oddity Tech uses an AI-powered platform with computer vision and generative AI to achieve 90% accuracy in product matching for the beauty industry.
• China's AI hardware sector is thriving despite US chip restrictions, evidenced by Shanghai Biren Technology's HK$5.6 billion oversubscribed offering and technical adaptations like DeepSeek's Manifold-Constrained Hyper-Connections.

Lattice Semiconductor stock jumps on AI chip buzz

Lattice Semiconductor (LSCC) shares rose 6% recently due to a sector-wide rally and excitement around its sensAI edge AI platform. The stock now trades at $78.65, showing a 39.75% return over the past year. Analysts believe the company is 3.2% undervalued with a fair value of $81.23, driven by the AI and edge computing boom. However, its price-to-sales ratio of 21.7 times is much higher than the industry average, and competition could affect future margins.

Entegris stock valuation rises with AI demand

Entegris (ENTG) provides materials for advanced semiconductor production, and its stock recently gained 6.3% to US$89.56 due to early signs of AI infrastructure demand. The company's fair value is estimated at US$100.50, suggesting it is 10.9% undervalued. This is based on expected cost reductions and better facility use. However, its current P/E ratio of 47.1x is higher than the industry average, and trade tensions or high debt could pose risks.

Unity Software stock rallies on AI advertising strength

Unity Software (U) is gaining attention after analysts upgraded its stock, citing its new machine learning model and strong Vector advertising business. The share price is now $44.25, with an 83.69% return over the past year. While a popular view suggests the stock is 15% overvalued with a fair value of $38.48, Unity has positive cash flow. Its Price to Sales ratio of 10.5 times is higher than the US software sector average, indicating a premium for its growth potential.

TeraWulf stock surges on AI data center news

TeraWulf (WULF) shares jumped significantly after receiving new regulatory approval in New York and securing financing for AI data centers. The stock currently trades at $12.74, with a strong 1-year and 3-year return despite recent volatility. Analysts believe TeraWulf is 40.6% undervalued, with a fair value of $21.44, supported by partnerships like Google's $1.8 billion lease backstop. However, its high price-to-revenue ratio of 31.8 times suggests a valuation driven by sentiment, and capital-intensive AI projects could strain its finances.

Pure Storage valuation rises with AI storage demand

Pure Storage (PSTG) is gaining attention for its efficient storage platforms and its recognition by Gartner as an enterprise storage leader. The company's stock trades at US$69.01, with a 2.6x return over three years, though it saw a 21.49% decline in the last 90 days. Analysts believe Pure Storage is 27.5% undervalued, with a fair value of US$95.16. This is due to increasing adoption of its Enterprise Data Cloud architecture and partnerships with hyperscalers like Meta, which are expected to boost revenue and margins from AI workloads.

Caterpillar expands engine plant for AI data centers

Caterpillar (CAT) reported a strong quarter with revenue up 9.5% and earnings beating expectations. The company plans a US$725 million expansion at its Lafayette Indiana engine plant to meet growing demand from AI-driven data center projects. This growth in its power and energy unit supports its earnings power. While the company balances growth investments with dividend commitments, investors must also consider potential impacts from new tariffs and pricing pressures.

GitLab faces risks with new AI pricing model

KeyBanc Capital Markets downgraded GitLab (GTLB) due to risks with its new hybrid pricing model for AI features. The company is shifting to a seat-plus-usage model, which creates uncertainty about customer adoption and revenue growth. Despite its long-term AI potential and a three-year collaboration with AWS, investors are concerned about how quickly these new features will generate profit. GitLab aims for $1.4 billion in revenue and $189.5 million in earnings by 2028, but its current unprofitability and pricing changes pose challenges.

Astera Labs stock rises on AI chip demand

Astera Labs (ALAB) shares rose with the semiconductor market, driven by demand for AI chips and cloud infrastructure. The stock is currently US$179.56, showing a 25.01% return over the past year. Analysts believe Astera Labs is 9.9% undervalued, with a fair value of US$199.37, due to its early work with hyperscalers and its UALink technology for AI Infrastructure 2.0. However, its high price-to-sales ratio of 41.9x suggests a premium valuation, and slower AI spending or increased competition could impact growth.

HP faces PC pricing pressure despite AI ambitions

HP (HPQ) management warned of potential pressure on PC pricing and profits in late 2026 due to higher memory chip costs and inflation from AI data center growth. The stock currently trades at US$22.12, showing declines over the last 30 and 90 days. Despite this, analysts suggest HP is 14.5% undervalued with a fair value of US$25.88, based on expectations of modest growth and stable margins. However, weak printing demand and rising memory costs could challenge these projections.

Top 3 AI stocks to buy this January

Investors looking to capitalize on the AI trend in January 2026 should consider NVIDIA, Microsoft, and Alphabet. NVIDIA dominates AI hardware with its advanced GPUs, crucial for data centers and AI model training. Microsoft integrates AI across its products, including Azure and Microsoft 365, and has invested in OpenAI, the creator of ChatGPT. Alphabet, Google's parent company, leads in AI research and development, embedding AI into its search engine, Google Cloud, and Waymo. These companies offer strong investment opportunities due to their leadership and innovation in the AI ecosystem.

Three leading AI stocks for January investments

For investors seeking long-term growth in the AI market, Nvidia, Microsoft, and Alphabet are top picks for January. Nvidia remains a key player with its GPUs, which are essential for AI models and highly demanded by data centers and cloud providers. Microsoft integrates AI across its products like Azure and Microsoft 365, boosted by its investment in OpenAI. Alphabet, through Google, drives AI innovation in its search engine, Google Cloud, and projects like Waymo and DeepMind. These established leaders offer strong exposure to the rapidly expanding AI technology.

Alphabet is a top AI growth stock for January

Alphabet (GOOGL, GOOG) stands out as a top AI growth stock for January due to its widespread AI integration across its businesses. Its AI investments span search, cloud computing, autonomous vehicles, and life sciences. Google Cloud is rapidly growing, using AI to offer advanced data analytics and machine learning solutions. YouTube also benefits from AI algorithms that personalize content and optimize ads, driving viewership and revenue. Alphabet's strong fundamentals and commitment to AI research position it for continued success.

Oracle and Palantir AI stock outlooks differ

Wall Street analysts have mixed views on AI stocks Oracle and Palantir. Palantir has seen impressive gains, up 147% in the past year, but trades at a high 256 times earnings, leading many to believe it is fully valued. Oracle, however, is expected to surge, with analysts predicting 60% upside. Oracle reported $455 billion in AI data center contracts, including a $300 billion deal with OpenAI, but faces concerns about debt and thin margins. Mizuho analyst Siti Panigrahi named Oracle a top pick for 2026, with a $400 price target.

Oracle and Palantir AI stock predictions vary

Wall Street analysts have different outlooks for AI stocks Oracle and Palantir. Palantir has delivered strong returns, up 147% in the last year, but its high valuation of 256 times earnings suggests it may be fully priced. Oracle, however, is expected to see significant growth, with analysts projecting 60% upside. Oracle secured $455 billion in AI data center contracts, including a $300 billion deal with OpenAI, but faces concerns about funding its data center build-out and potential thin margins. Mizuho analyst Siti Panigrahi remains bullish, naming Oracle a top pick for 2026 with a $400 price target.

Seagate sees strong AI demand for Mozaic hard drives

Seagate Technology Holdings (STX) is experiencing increased demand for its HAMR-based Mozaic hard drives from AI-driven data centers and social media platforms. These drives offer higher storage capacity and improve profit margins, reinforcing the cost advantage of hard disk drives for cloud infrastructure. Heat-Assisted Magnetic Recording (HAMR) technology allows Seagate to achieve greater storage density, crucial for AI and big data. Analysts are watching how Seagate's ability to scale HAMR production will impact its revenue and market share.

China's AI sector thrives despite US chip limits

China's AI hardware sector shows strong confidence, with Shanghai Biren Technology's Hong Kong debut drawing high demand despite US chip restrictions. Biren's H-share offering raised HK$5.6 billion, oversubscribed more than 2,300 times, signaling a shift to regional capital markets. Chinese AI developers are also adapting technically, focusing on software efficiency and training architecture. The DeepSeek paper introduced Manifold-Constrained Hyper-Connections (mHC) to improve training stability for large AI models, helping China work within hardware constraints.

ServiceNow boosts AI security with Armis acquisition

In 2025, ServiceNow expanded its AI and security efforts by acquiring several firms and agreeing to buy Armis for about US$7.75 billion in cash. This move aims to strengthen its security workflows. The Security and Risk segment has now become ServiceNow's fifth business, generating over US$1.00 billion in annual contract value. This highlights how AI-enabled security is becoming a central part of the company's workflow platform.

Three top AI stocks for long-term investors

For long-term investors, ASML, Nvidia, and Microsoft are excellent AI stocks to consider in January. ASML is crucial for AI chip production as the sole maker of extreme ultraviolet lithography machines. Nvidia powers AI data centers with its GPUs and maintains a strong 53% gross margin. Microsoft offers broad AI exposure through its Azure cloud platform, significant investment in OpenAI, and leadership in enterprise software and gaming. These companies are fundamentally strong and positioned to benefit from the growing AI market.

Digital Realty Trust is a top AI infrastructure stock

Digital Realty Trust (DLR), a real estate investment trust focused on data centers, stands out as a strong AI stock for the next decade. The company benefits from the surging demand for data center capacity, driven by AI models requiring massive computing power. Digital Realty's large portfolio of facilities and strategic land holdings give it a competitive edge in providing scalable and reliable infrastructure. Its long-term data center leases ensure a stable revenue stream, and its commitment to sustainability aligns with important investment trends.

Oddity Tech uses AI to transform the beauty industry

Oddity Tech (ODD) is transforming the beauty industry with its unique AI-powered platform. The company uses AI to help consumers find the best beauty products, achieving 90% accuracy in product matching. Its platform uses advanced computer vision and hyperspectral vision to map facial contours and analyze skin conditions. Generative AI even projects how customers might look after using tailored products. This multi-modal data approach continuously improves Oddity's AI models, driving repeat business and supporting product innovation.

Datavault AI stock jumps 42.6 percent after upgrade

Datavault AI (NASDAQ:DVLT) shares surged 42.6% during Tuesday trading following an analyst upgrade. The company, which provides an AI-powered data analytics platform, reported its Q4 2023 earnings on March 14th. Datavault AI earned $1.31 million in revenue, slightly above the $1.30 million estimate, though it reported an earnings per share loss of $0.13. Despite this recent jump, the stock has fallen 3.5% over the last 12 months.

Sources

• Lattice Semiconductor (LSCC): Assessing Valuation After AI-Fueled Sector Rally and sensAI Platform Momentum
• A Look At Entegris (ENTG) Valuation As AI Infrastructure Demand Shows Early Signs Of An Upturn
• Unity Software (U): Reassessing Valuation After Analyst Upgrades and AI Advertising Momentum
• TeraWulf (WULF): Assessing Valuation After Regulatory Win, AI Data Center Financing and Executive Equity Grants
• Assessing Pure Storage (PSTG) Valuation As AI Storage Recognition And Hyperscaler Ties Draw Fresh Attention
• Is AI-Fueled Data Center Engine Demand Altering The Investment Case For Caterpillar (CAT)?
• Is GitLab’s (GTLB) Hybrid Pricing Shift Reframing the Core AI Monetization Story?
• Astera Labs (ALAB) Valuation Check After Sector AI Rally Lifts Semiconductor Stocks
• A Look At HP (HPQ) Valuation As AI PC Ambitions Meet Ongoing Demand And Cost Uncertainty
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• Will AI-Fueled Demand for HAMR Drives Rewrite Seagate Technology Holdings' (STX) Earnings Narrative?
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• Datavault AI (NASDAQ:DVLT) Trading Up 42.6% Following Analyst Upgrade