An updated edition of the Nov. 28, 2025, article.
Artificial intelligence (AI) is reshaping industries by enabling machines to analyze massive volumes of data, identify patterns and make increasingly sophisticated decisions. The fast adoption of generative AI, agentic AI and multimodal learning — accelerated by powerful hardware such as GPUs and TPUs — is driving breakthroughs across healthcare, finance, robotics, cybersecurity and e-commerce. From conversational chatbots and medical diagnostics to fraud prevention and autonomous systems, AI has become a core enabler of organizational agility, while also driving meaningful gains in productivity and operational efficiency.
Per Gartner, global AI spending is expected to hit $2.5 trillion in 2026, indicating 44% growth over 2025. Per IDC, global spending on AI infrastructure is expected to reach $758 billion by 2029. U.S. tech giants, including Microsoft MSFT, Adobe, Alphabet GOOGL and Meta Platforms META, have been at the forefront of bringing remarkable advances to AI technology, well supported by powerful AI chips from NVIDIA NVDA, Analog Devices ADI and Micron Technology MU. The deals between OpenAI and AMD, as well as OpenAI and NVIDIA, reflect growing demand for AI chips. Alphabet’s Tensor Processing Units are also gaining traction. Per NVIDIA, spending on AI infrastructure by cloud service providers and hyperscalers is expected to hit $600 billion in 2026, an increase of more than $200 billion estimated at the beginning of 2025.
AI models continue to evolve thanks to strong spending on developing large language models (LLMs). Microsoft-backed OpenAI introduced GPT-5 in August, which offers multi-modal understanding across text, images, audio and more. Anthropic’s latest Claude Opus 4.5 targets enterprise workflows and advanced agentic use cases. Expanding its generative AI footprint, Alphabet introduced Nano Banana Pro, which is built on Gemini 3 Pro. Alphabet is infusing AI into its search business in order to attract more users, while Meta Platforms’ focus on integrating AI into its platforms is driving user engagement. Both initiatives are driving ad revenue growth.
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Micron Technology is benefiting from surging demand for HBM and robust DRAM pricing recovery. The pricing benefits are likely to be driven by rising AI server demand, causing a scarcity in the availability of cutting-edge DRAM supplies. This will support Micron’s margin expansion and profitability. This Zacks Rank #1 (Strong Buy) company is capitalizing on the AI boom with its HBM3E solutions, which are increasingly being adopted by major hyperscalers and enterprise customers. You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron is poised to be the key beneficiary of surging AI-related infrastructure spending, as companies continue to build out GPU clusters and AI data centers that require advanced memory solutions. AI PCs are an important part of Micron’s growth plan. MU’s new LPCAMM2 memory is made for AI-ready laptops and workstations that need to handle heavy workloads, such as AI tasks, simulations and multitasking.
An expanding partner base that includes the likes of NVIDIA, AMD and Intel, is enabling Micron to capture a larger share of the AI infrastructure market. Deepening relationship with major cloud and enterprise customers ensures stable revenue streams and reduces the risk of pricing volatility.
Analog Devices is benefiting from secular growth drivers in automation, AI infrastructure, and automotive electrification. This Zacks Rank #1 company is riding on its strong market position in high-performance analog, especially in the industrial, communications infrastructure and consumer markets.
ADI is benefiting from a diversified portfolio and a resilient business model. The company believes that the industrial segment will remain one of its fastest-growing markets in fiscal 2026. Automation demand is rebounding, with increased adoption of software-defined connectivity solutions that enable decentralized intelligence in manufacturing.
AI-driven demand for automatic test equipment is fueling a surge in Analog Devices’ signal chain and power content. Accelerating AI investments bodes well for Analog Devices’ communications segment. Robust demand for ADI’s solutions across both wireline/data center and wireless markets is a key catalyst. Analog Devices is also targeting robotics and humanoid markets as a multi-year growth driver for its industrial automation business.
Microsoft’s investment in OpenAI and acquisitions have been shaping the company’s prospects in the AI field. This Zacks Rank #2 (Buy) company announced the acquisition of Osmos, an agentic AI platform that will enhance autonomous data engineering capabilities within Microsoft Fabric, reinforcing its commitment to simplifying enterprise AI adoption in January. Meanwhile, Azure’s competitive moat stems from its ability to support over 11,000 AI models within a unified infrastructure, enabling enterprises access multiple providers without rebuilding technology stacks. This bodes well for MSFT’s prospects.
Microsoft’s partnership with OpenAI continues delivering strategic advantages. An incremental $250 billion Azure services contract with OpenAI, announced in the fiscal first quarter, represents a substantial future revenue opportunity. Azure AI Foundry now serves 80,000 customers, including 80% of the Fortune 500, demonstrating broad enterprise adoption of Microsoft’s AI platform. Microsoft has deployed the world’s first large-scale cluster of NVIDIA GB300s and plans to increase total AI capacity by more than 80% this year while roughly doubling data center footprint over two years.
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