The Best Artificial Intelligence (AI) Growth Stocks on the Nasdaq That Wall Street Loves Right Now

After a first-quarter correction in the Nasdaq Composite, investors began piling back into technology and artificial intelligence (AI) stocks in April, despite continued uncertainty over the war in Iran.

Most likely, investors saw valuations decline on some good AI stocks and decided to jump back in. For many AI stocks, the issue is not a slowdown in revenue or demand; it's mainly because stocks were trading at unusually high multiples, with some AI stocks trading far above expected earnings.

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Investors should still be concerned about high P/E ratios for AI stocks, because many remain overvalued and may not have the high demand or strength in their market to sustain the high prices -- and they may be more challenged by an economic or market downturn.

If you're looking for guidance from Wall Street analysts, here are two AI stocks they are in love with right now.

1. Applied Digital

Applied Digital (NASDAQ: APLD) is a company that literally sits at the heart of the AI boom as an owner and developer of AI data centers. The emergence of AI has created the need for AI factories, facilities that can handle the high-performance computing needs that AI applications demand. According to Motley Fool research, some $4 trillion is projected to be spent on data centers in 2030 worldwide, up from $1 trillion in 2025.

They are a relatively new phenomenon, and Applied Digital was one of the first movers in purpose-built AI data centers. In fact, its first data center dedicated to AI processing is open in North Dakota, fully rented by cloud company CoreWeave. It also has three legacy Bitcoin mining centers, but the focus of its operations is now on AI data centers.

It has four new facilities in the works, including three at its Polaris Forge campus in North Dakota and one at Delta Forge in Texas. All four will be operational between late 2026 and the end of 2027. Oracle has been signed to fill one of them while the company is in negotiations with another hyperscaler for its Texas facility.

Interest is high among hyperscalers for all of these new facilities, CEO Wes Cummins said on the recent earnings call. Thus, Applied Digital is targeting $1 billion in net operating income (NOI) over the next five years. To put that into perspective, the company made $17.6 million in operating profit from its AI data centers and $13.9 million from its crypto mining facilities in its latest quarter -- which is a total of $31.5 million. So massive growth is expected.

On Wall Street, 100% of the 13 analysts that cover it rate Applied Digital stock a buy, with a median price target of $43 per share. That would suggest 32% upside for the stock over the next 12 months or so. Investors should note that the company is not yet profitable and the forward P/E projection is high, but once these data centers start getting filled, the expectations are for high earnings. This is probably one you buy at a dip and wait for.

2. Nvidia

Nvidia (NASDAQ: NVDA) has been a Wall Street darling for years, and for good reason. It is the world's most valuable company and the dominant player in its industry, with nearly 90% market share in graphics processing units (GPUs) for AI data centers.

While its stock price has stumbled in recent months, its revenue and earnings have not -- in fact, they have accelerated. The pullback was mainly due to its high valuation and to investors likely cashing out after a three-year bull market run.

The sell-off created an incredible buying opportunity for the AI juggernaut, as its P/E ratio dropped to 41. But more importantly, its 12-month forward P/E ratio fell to 24, which is right around the Nasdaq average, while its five-year PEG ratio, based on long-term projected earnings, is below 1 at 0.72. That means it's a value.

This is a great time to buy Nvidia stock, and analysts are mostly in agreement. Roughly 93% of the 70 analysts who cover Nvidia say it is a buy. It has a median price target of $267.50, which suggests about 33% upside over the next year.

Unlike Applied Digital, which is a more speculative play based on projections of filling its data centers, Nvidia is a no-brainer and a proven earnings machine that is not slowing down.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Nvidia, and Oracle. The Motley Fool has a disclosure policy.