U.S. stock markets closed first-quarter 2025 on a negative note. Wall Street is likely to remain volatile primarily due to uncertainty regarding the Trump administration’s tariffs and trade policies, as well as their impact on the U.S. economy, particularly on an already elevated inflation rate.
The technology sector, particularly artificial intelligence (AI)-related stocks, suffered the most following the Fed’s ambiguity about further lowering interest rates anytime soon and the fear of a near-term recession.
Year to date, several AI stocks have provided negative returns destroying the wealth of investors. However, a handful of these stocks currently looks very promising for the rest of 2025. Here we recommend five such large-cap stocks with a favorable Zacks Rank.
These are AppLovin Corp. APP, Amphenol Corp. APH, Broadcom Inc. AVGO, Arista Networks Inc. ANET and Marvell Technology Inc. MRVL. These stocks have strong growth potential for 2025 and have seen positive earnings estimate revisions over the last 60 days. Finally, these stocks have enormous short-term price upside potential.
The chart below shows the price performance of our five picks year to date.
Zacks Investment Research
Image Source: Zacks Investment Research
AppLovin Corp.
AppLovin is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform that enables developers to market, monetize, analyze and publish their apps. APP currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AppLovin’s last reported financial results demonstrate its strong fundamentals and growth potential. The introduction of APP’s AI-powered AXON 2.0 technology and strategic expansion in gaming studios have significantly boosted revenue growth. APP’s Ai-enabled Audience+ marketing platform is also boosting its reach into direct-to-consumer (DTC) and e-commerce space.
Impressive Valuation for APP Stock
AppLovin has an expected revenue and earnings growth rate of 20.4% and 51.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.5% in the last 60 days.
It has a long-term (3-5 years) earnings growth rate of 20% compared with the S&P 500’s growth rate of 12.8%. The company has an ROE of 175.36% compared with -12.94% of the industry and 17.14% of the S&P 500.
Tremendous Short-Term Price Upside for APP Shares
AppLovin is currently trading at a 49.5% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 87.8% from the last closing price of $264.97. The brokerage target price is currently in the range of $200 to $650. This indicates a maximum upside of 145.3% and a downside of 24.5%.
Amphenol Corp.
Amphenol provides connectivity solutions using AI and ML (machine learning) technologies. It provides AI-powered high-density, high-speed connectors and cables, and interconnect systems optimized for signal integrity and thermal performance. APH currently carries a Zacks Rank #2 (Buy).
Amphenol benefits from a diversified business model. Expansion of spending on both current and next-generation defense technologies bodes well for APH’s top-line growth. Apart from Defense, APH’s prospects ride on strong demand for its solutions across Commercial Air, Industrial and Mobile devices.
For the first quarter of 2025, Amphenol expects a mid-to-high single-digit range increase in Commercial Air sales. APH’s diversified business model lowers the volatility of individual end markets and geographies. Its strong cash flow generating ability is noteworthy.
Excellent Valuation for APH Stock
Amphenol has an expected revenue and earnings growth rate of 21.6% and 23.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% in the last 60 days.
APH has a long-term earnings growth rate of 14.9%. The company has an ROE of 25.67% compared with 4.49% of the industry. It has a P/E ratio of 28.43X compared with 28.43X of the industry and 18.25X of the S&P 500. APH has a current dividend yield of 1%.
Solid Short-Term Price Upside for APH Shares
Amphenol is currently trading at a 17.4% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 29.3% from the last closing price of $65.59. The brokerage target price is currently in the range of $63 to $102. This indicates a maximum upside of 55.5% and a downside of 3.9%.
Broadcom Inc.
Zacks Rank #2 Broadcom has been benefiting from strong demand for its networking products and custom AI accelerators (XPUs). In fiscal 2024, AI revenues jumped 220% over fiscal 2023 to $12.2 billion and represented 41% of semiconductor revenues. AVGO’s XPUs are necessary to train Generative AI models, and they require complex integration of compute, memory, and I/O capabilities to achieve the necessary performance at lower power consumption and cost.
AVGO’s next-generation XPUs are in 3 nanometers and will be the first of its kind to market in that process node. Broadcom remains on track for volume shipment of these XPUs to its hyperscale customers in the second half of fiscal 2025. AVGO sees massive opportunities in the AI space as specific hyperscalers have started to develop their own XPUs.
Broadcom believes that by 2027 each of its three hyperscalers would deploy 1 million XPU clusters across a single fabric. Serviceable Addressable Market for XPUs and network are expected to be between $60 billion and $90 billion in fiscal 2027 alone.
Attractive Valuation for AVGO Stock
Broadcom has an expected revenue and earnings growth rate of 21% and 34.7%, respectively, for the current year (ending October 2025). The Zacks Consensus Estimate for current-year earnings has improved 4% in the last 30 days. AVGO has a long-term earnings growth rate of 19%. The company has an ROE of 32.18% compared with 2.77%. It has a current dividend yield of 1.40%.
Huge Short-Term Price Upside for AVGO Shares
Broadcom is currently trading at a 33.5% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 48.5% from the last closing price of $167.43. The brokerage target price is currently in the range of $185 to $300. This indicates a maximum upside of 79.2% and no downside.
Arista Networks Inc.
Zacks Rank #2 Arista Networks has been benefiting from positive demand trends owing to its strong product portfolio, which is highly scalable and programmable, and provides data-driven automation, analytics and support services.
ANET’s EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Its AI suite also focuses on network security and optimization.
ANET’s AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration.
Arista Networks should benefit from its software-driven, data-centric approach that helps customers build their cloud architecture and enhance the cloud experience they offer their clients. Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. The growing demand for 200- and 400-gig high-performance switching products augurs well for ANET’s long-term growth.
Strong Valuation for ANET Stock
Arista Networks has an expected revenue and earnings growth rate of 18.1% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.8% in the last 60 days. ANET has a long-term earnings growth rate of 14.4%. The company has an ROE of 29.91% compared with 0.7% of the industry.
Massive Short-Term Price Upside for ANET Shares
Arista Networks is currently trading at a 41.9% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 55.4% from the last closing price of $77.48. The brokerage target price is currently in the range of $85 to $145. This indicates a maximum upside of 81.9% and no downside.
Marvell Technology Inc.
Zacks Rank #1 Marvell Technology is benefiting from the strong demand environment across the data center end market. In the last reported quarter, MRVL’s data center end market revenues increased 98% year over year and 25% sequentially, propelled by strong revenue growth across AI-driven demand for PAM products and ZR electro-optics.
MRVL is a promising player in the solid-state drive controllers’ market. The storage market is seeing a steady increase in demand, given the fast-growing data volume, especially the exponential growth in unstructured data. Completion of inventory digestions is likely to aid growth for MRVL across the enterprise networking and carrier infrastructure end markets.
Lucrative Valuation for MRVL Stock
Marvell Technology has an expected revenue and earnings growth rate of 43.8% and 75.8%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 1.8% in the last 30 days.
MRVL has a long-term earnings growth rate of a significant 42.9%. It currently carries a forward P/E of 22.50X for the current year, compared with 22.88X for the industry. It has a current dividend yield of 0.4%.
Astonishing Short-Term Price Upside for MRVL Shares
Marvell Technology is currently trading at a 51.7% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 95.2% from the last closing price of $61.57. The brokerage target price is currently in the range of $90 to $188. This indicates a maximum upside of 205.3% and no downside.
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