Valuations of several technology andartificial intelligence stocks are expected to remain in focus in 2026, as investors are concerned about the payoffs on massive AI spending.
Nonetheless, top Wall Street analystscontinue to be bullish on several tech and AI plays based on thorough analysis of their fundamentals, strong execution, and growth potential.
Here are three stocks favored by some ofWall Street’s top pros, according to TipRanks, aplatform that ranks analysts based on their past performance.
Amazon
This week’s firstpick is e-commerce and cloud computing giant Amazon
(AMZN). In a research note on the 2026 outlookfor stocks in the AI and internet space, RBC Capital analyst Brad Erickson called Amazon one of his favorite ideas, citing “Bestin-class visibility on AI infrastructure ROIC [return on invested capital] with compelling product cycle/capacity acceleration cycle coming.”
Erickson reaffirmed a buy rating on Amazonstock with a price forecast of $300. Interestingly, TipRanks’ AI Analyst is also bullish on AMZN stock with an “outperform” rating but a lower price targetof $240.
The top-rated analyst said that he likesthe structural positioning of the company’s Amazon WebServices (AWS) cloud unit for two key reasons. First, Erickson highlighted that AWS has the most diversified and hedged revenue sources, with its core business largely unaffected by generative AI and not a competitor of ChatGPT maker OpenAI. Second, Erickson thinks that AWS is the most disciplined hyperscaler when it comes to capital spending.
Notably, based on his ROIC scenarioanalysis, Erickson expects Amazon to see the fastest returns, with Alphabet-owned Google expanding more gradually, andMeta Platforms
lagging in capital efficiency due to itsindirect revenue model. He expects AWS to have the highest marginal contribution margin as the cloud unit increases its spending, thanks to its
pay-as-you-go model and strong efficiency, with new capacity that is often pre-booked and revenue that is directly linked to infrastructure usage.
Based on his optimistic outlook, Ericksonraised his revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) estimates for 2026 and 2027, driven by higher AWS growth expectations and cost efficiencies. For 2028, the analyst expects revenue
growth of 10% and an adjusted EBITDA margin of 30%.
Erickson ranks No. 195 among more than10,100 analysts tracked by TipRanks. His ratings have been successful 58% of the time, delivering an average return of 21.9%. See Amazon Hedge Funds Trading Activity on TipRanks.
Microsoft
Let’s look atanother tech giant, Microsoft
(MSFT). Following meetings with the company’s executives across businesses, Morgan Stanley analyst Keith Weissreiterated a buy rating on MSFT stock with a price target of $650. The stock
scores an “outperform” ratingfrom TipRanks’ AI Analyst with a price target of $562.
“Meeting with executives across Microsoftbusinesses leaves us with conviction on robust demand translating to durable mid-teens top-line growth and increased confidence in ROI contributing to continued operating margin expansion,” said Weiss.
Among the key takeaways from his meetingsthat he mentioned, Weiss highlighted that demand for Microsoft Azure has been stronger than what the company expected at the start of the year. The analyst added that demand is solid not only for Azure AI but across every product
within the Azure portfolio, thanks to broader IT modernization efforts of enterprises.
Consequently, Weiss raised his Azureestimates, assuming Azure AI gross margin (excluding OpenAI revenue share) reaches 30% by fiscal 2029. In fact, Weiss thinks that Azure AI margin can
exceed 40%, suggesting huge upside to his estimates in the years ahead.
Overall, Weiss called MSFT his Top Pick inthe large-cap software sector, with the stock trading at 23x his calendar year 2027 GAAP EPS estimate of $20.65. The analyst contends that sustained top-line demand and the possibility for further margin expansion, as reflected in the company’s Q1 FY26 results, are not yet fully valued bythe market.
Weiss ranks No. 400 among more than 10,100analysts tracked by TipRanks. His ratings have been profitable 63% of the time, delivering an average return of 12.1%. See Microsoft Technology Ownership Structure on TipRanks.
Micron Technology
Memory and storage solutions providerMicron Technology (MU)impressed investors with market-beating results for the first quarter of fiscal 2026. The company also issued an upbeat outlook for the fiscal second quarter, reflecting strong demand for its high-performance memory and storage products amid the rapid growth in AI data centers.
Impressed by the Q1 FY26 print, Stifelanalyst Brian Chin reiterated a buy rating on Micron stock with a price target of $300. TipRanks’ AI Analyst is also bullish on MUstock, with an “outperform”rating and a price target of $285.
Discussing the “blockbuster” quarterly performance and outlook, Chin observed that Micron easilysurpassed Stifel’s above-consensus expectations with ahigher average selling price (ASP) driving a 20% sequential growth in DRAM and NAND revenue. The 5-star analyst highlighted the robust demand, saying, “Demand is outstripping supply, with Micron only able to meet 1/2 to2/3 of some key customers’ near term demand.”
Chin also noted the impressive rise inmargins across all of Micron’s business units,including the consumer-oriented Mobile and Client Business division, which saw its gross margin jump to 54% in Q1 FY26 from 36% in Q4 FY25.
The analyst also discussed Micron’s solid guidance and added that despite industry supply constraints,Micron expects both DRAM and NAND bit shipments to increase by 20% in 2026.
Overall, Chin remains bullish on MU stock and noted that after another round of positive estimate revisions, the stock trades at less than 6x his next-12 months earnings per share estimate.
Chin ranks No. 350 among more than 10,100analysts tracked by TipRanks. His ratings have been profitable 63% of the time, delivering an average return of 25.6%. See Micron Financials on TipRanks.