The rapid expansion of AI is steadily reshaping the broader tech landscape, with many people already interacting with AI-powered chat tools that are beginning to challenge traditional search as a primary way of accessing information. That shift, however, represents only one aspect of a much wider transformation, as AI continues to find applications across industries, from assisting software developers and streamlining marketing operations to organizing complex medical data, with new use cases continuing to emerge as adoption deepens.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
A boom like this is sure to bring both winners and losers in its wake. Right now, it looks like semiconductor firms are near the top of the winner’s list – silicon chips are an essential ingredient in AI hardware, and the chip makers, as a group, are realizing strong profits and laying serious work backlogs as demand outstrips supply. On the flip side, software companies are facing challenges. AI is automating a lot of the work they used to do for their clients. But some software firms are adapting well, incorporating AI tools into their products and boosting sales.
Against this backdrop, Wall Street analysts have been closely evaluating how AI adoption is influencing company outlooks and valuations, offering insight into where opportunities may be emerging as the landscape continues to evolve. Using the TipRanks database, we’ve zeroed in on two AI-linked stocks that analysts believe are worth a closer look in the months ahead.
STMicroelectronics (STM)
We’ll start with STMicroelectronics, a $45 billion European semiconductor company based in Geneva. STMicro offers a wide range of products, including automotive, industrial, and power conversion ICs, analog circuits, MPUs and MCUs, wireless solutions, power transistors, and even proprietary ASIC technologies. Like most semiconductor companies, STMicro has put together a diverse set of products to find customers across the tech industry.
In particular, STMicro has its hands in the realm of edge AI and cloud-connected autonomous devices. These are rapidly growing fields, and the company’s products support both their proliferation, their connections, and their expansion of AI capabilities. Along with this, STMicro also produces optical transceivers, a vital component of data center interconnections. The company has a line of proprietary silicon photonics that provide power-efficient, high-performance AI tech solutions.
STMicro’s products are found in a wide range of applications, including audio devices, vehicle control systems and lighting, consumer edge AI, industrial lighting and motor control, wired and wireless connectivity, and plenty more. STMicro has found that diversification has been the key to success.
On the financial side, the company has started fiscal 2026 with revenue growth and an earnings miss. Revenue in 1Q26, which ended on March 28, came to $3.1 billion, up 23% year-over-year and nearly $41 million better than had been expected. At the bottom line, the company’s non-GAAP net income came to $0.13 per share based on $122 million, and it missed the forecast by 5 cents per share.
For Craig-Hallum analyst Anthony Stoss, the key here is that STMicro has its hands in some seriously high-growth areas, noting: “While the company does not break it out, we believe MCUs could be 30-35% of total revenues and could grow 30-50% YOY. Further, we believe higher pricing could last well into 2027 and possibly through 2028. STM is one of the top MCU makers by market share, so we see upside in the stock over the next few years.”
“Further,” the analyst added, “we highlight STM expects over $500M in datacenter revenue in 2026 and well over $1B in 2027. The company noted they expanded engagement with AWS through a multi-year, multi-billion-dollar deal, including silicon photonics. Moreover, STM noted they are ramping shipments of their LEO Satellite to their 2nd largest customer…. We believe investors can now look at STM given cost optimization, GM accretion, and a material benefit from MCU price increases in the near-term.”
To this end, Stoss puts a $58 price target on STM shares, along with a Buy rating. His price target implies a one-year upside potential of ~15%. (To watch Stoss’s track record, click here)
Overall, STM is currently rated as a Moderate Buy from Wall Street’s analysts, based on 6 recent reviews that include 4 Buys and 2 Holds. The shares are priced at $50.47, and their $62.80 average price target suggests the stock will gain 24% in the coming months. (See STM stock forecast)
Twilio, Inc. (TWLO)
Next up is Twilio, a cloud computing and software firm that operates in the communications sector. Twilio, which is based in San Francisco, has been in operation for 18 years and offers a versatile comms platform for business telecommunications. The company’s platform provides solutions for everything from voice communications, digital messaging, and email to identity confirmation and authentication and customer data management. Twilio has more than 335,000 enterprise customers, including such names as Philips, Atlassian, Dell, Shopify, and Lyft.
A key selling point for Twilio is that it offers one platform to cover every interaction – making it a true communication-platform-as-a-service (CPaaS) system. Twilio boasts that its platform has powered trillions of customer engagement calls across the globe through a trusted, transparent service. The platform facilitates compliance, security, and data privacy, putting trust first and supporting quality customer experiences.
Backing up all of this, Twilio also offers Conversational AI, a set of tools designed to bring AI analysis and automation to voice, SMS, WhatsApp, and web chat message channels. Conversational AI is a set of technologies using AI tech to bring best-in-class customer service through the adoption of multiple AI ecosystems. The tech is presented as a more context-aware tool, capable of more than just ‘chatbot’ functions.
Twilio will report its next set of financial results this Thursday, but we can look back at the Q4 release to see where the company stands. For 4Q25, Twilio reported $1.37 billion in quarterly revenue, up 15% year-over-year and some $49 million over the forecast. The company’s $1.33 non-GAAP EPS beat the estimates by a dime.
This stock has caught the attention of Bank of America analyst Koji Ikeda, who sees this company as a natural leader in its field.
“We think Twilio will prove to be one of the key infrastructure players for AI-driven voice and messaging uses cases, where scale and reliability are critical. We think its key growth metric, gross profit dollar growth will continue accelerating, as we forecast growth of +10% y/y for FY28E, up from +9% for FY26E. This should also drive strong free cash flow margin expansion, which we expect to reach 21.9% in FY28E, up from 18.6% in FY26E. We believe all of this is not yet fully reflected in the stock,” Ikeda opined.
The analyst puts conviction behind his call, assigning a Buy rating to TWLO along with a $190 price target, implying the shares could rise 32% over the next year. (To watch Ikeda’s track record, click here)
All in all, across 19 recent analyst reviews, TWLO holds a Moderate Buy consensus, supported by 14 Buys, 4 Holds, and just 1 Sell. With the stock trading at $143.79, the average price target of $151.82 points to a more modest 5.5% upside from current levels. (See TWLO stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.