The stock market closed out 2025 on a high note, thanks largely to artificial intelligence. Tech companies at the heart of AI development saw their shares rise sharply over the calendar year. Investors poured money into firms building the hardware, software, and services that make AI work, creating one of the strongest years for the sector in recent memory.
Several stocks stood out for their impressive percentage increases. Micron Technology, Inc. (NASDAQ: MU) topped the list with a gain of about 229% for the year. The company makes high-bandwidth memory chips vital for AI systems that process huge amounts of data quickly. Demand from data centers run by big tech firms helped Micron’s sales in its cloud memory segment jump nearly 100% in one recent quarter. ​
Palantir Technologies Inc. (NYSE: PLTR) followed with gains around 143%. Its AI platform helps businesses and governments make faster decisions from complex data. Palantir saw strong growth in U.S. commercial and government contracts, pushing its full-year revenue guidance toward $4.4 billion. Broadcom Inc. (NASDAQ: AVGO) delivered roughly 120% growth by supplying custom chips and networking equipment for AI infrastructure. Clients like major cloud providers relied on its products to build out massive computing systems. Nvidia Corporation (NASDAQ: NVDA) rounded out key performers at about 85% to 180%, depending on the measure, as its graphics processors remained essential for training AI models.
These gains rippled across broader markets. The Nasdaq Composite ended the year up significantly, with AI-related tech stocks driving much of the momentum. The S&P 500 rose over 17%, marking a third straight year of strong returns fueled by AI enthusiasm. Semiconductor and data storage companies filled the top spots in the index, as hyperscalers like Microsoft, Amazon, Alphabet, and Meta committed hundreds of billions to AI data centers.
Enterprise adoption played a big role in the surge. Companies moved AI from experiments to everyday operations, boosting demand for supporting technologies. Tools like autonomous agents quadrupled in usage at some firms, while investments in GPUs and custom chips hit record levels. This shift rewarded not just chip makers but also data platform providers and server builders.
Looking to 2026 brings questions about sustainability amid policy changes. The Trump administration may ease regulations on tech development, which could accelerate AI progress. Stock market experts express optimism, with the S&P 500 expected to continue gains above 10% for a third year, bolstered by AI spending and corporate profits.
Goldman Sachs forecasts AI capital spending to grow 30% annually through 2027, though a digestion phase might follow as companies focus on returns. JPMorgan sees the Nasdaq gaining 15% to 20% if earnings keep beating expectations but cautions on volatility from trade tensions or higher interest rates. Energy demands from data centers remain a concern, potentially spurring investments in power infrastructure.
Bloomberg Intelligence predicts hardware leaders could see 50% to 70% more upside if enterprise adoption reaches 40% of firms. Barclays notes risks of overcapacity in some areas, suggesting pullbacks for weaker players. Vanguard warns of stretched valuations, with the Nasdaq-100 at 31 times forward earnings, urging focus on proven execution.
Overall, AI has reshaped market dynamics in ways that feel enduring. Investors face a choice between chasing momentum and seeking stability as new realities emerge. The path forward depends on how well promises turn into lasting profits.Â
