TLDR
- AppLovin joins S&P 500 on September 22 after 4,650% stock surge driven by AI advertising platform
- Zscaler reports 21% revenue growth with AI cybersecurity tools accounting for 27% of new business
- Micron Technology capitalizes on AI memory chip boom with HBM revenue jumping 50% sequentially
- All three companies show accelerating growth tied to expanding AI adoption across industries
- Analyst price targets suggest continued upward momentum for AI sector stocks
Three artificial intelligence companies are demonstrating the sector’s continued growth potential through strong financial performance and expanding market opportunities. AppLovin’s upcoming S&P 500 inclusion highlights how AI-driven business models are reshaping traditional industries.
AppLovin’s AI-Powered Advertising Success
AppLovin will officially join the S&P 500 index on September 22, capping an extraordinary run that saw its stock surge 4,650% since January 2023. This performance more than doubled Palantir’s impressive 2,280% return over the same period.
The company’s growth stems from Axon, its proprietary AI recommendation engine that matches advertisers with publishers. Morgan Stanley analysts have called Axon a “best-in-class machine learning ad engine” for its ability to predict which ad impressions will produce desired results.
AppLovin reported strong second-quarter results with revenue jumping 77% to $1.2 billion. GAAP net income increased 168% to $2.39 per diluted share. The company traditionally focused on mobile advertising for video game developers but is expanding into e-commerce advertising, potentially increasing its addressable market more than tenfold.
The company plans to launch a self-service advertising platform in October, followed by a global rollout next year. CEO Adam Foroughi describes this as “the foundation for our next decade of growth.” Wall Street estimates AppLovin’s earnings will grow 54% annually through 2026.
Historical data shows S&P 500 additions typically drive 14% gains in the following 12 months. Among 159 companies added to the index over the past decade, stocks returned an average of 13.9% during their first year as members.
Zscaler Captures AI Cybersecurity Demand
Zscaler is capitalizing on growing demand for AI-powered cybersecurity solutions. The company reported 21% revenue growth in its fourth quarter to $719 million, with non-GAAP net income jumping 24%. Full-year adjusted earnings reached $3.28 per share, up 26%.
AI-focused tools accounted for 27% of Zscaler’s new business in fiscal 2025. These emerging products include services that secure large language models and applications while providing AI virtual assistants to simplify cybersecurity operations.
The company recently launched Zscaler AI Guard, designed to stop attacks, protect sensitive data, and ensure regulatory compliance for businesses adopting AI technology. The cybersecurity AI market is expected to grow nearly fourfold by 2030, reaching $94 billion in annual revenue.
Zscaler’s remaining performance obligations jumped 31% year-over-year to $5.8 billion, exceeding its 23% revenue growth rate. This strong revenue pipeline suggests accelerating earnings growth ahead. The stock has gained 50% in 2025, with analyst price targets pointing to another 19% upside.
Micron Benefits from AI Memory Chip Boom
Micron Technology is riding the wave of surging demand for AI memory chips. The company manufactures high-bandwidth memory (HBM) that enables AI processors to handle massive data loads at high speeds while maintaining energy efficiency.
Micron’s HBM revenue increased over 50% sequentially in recent quarters as chip designers integrate more memory into their AI processors. The company’s overall revenue and earnings have jumped at an extraordinary pace as AI adoption accelerates.
The HBM market is projected to explode from $4 billion in 2023 to $130 billion by 2030. Morningstar estimates Micron could capture a 20% market share and see HBM revenue increase sixfold over five years to $30 billion by 2030.
Beyond data center applications, Micron is positioned to benefit from AI adoption in smartphones and personal computers. The stock has gained 40% in 2025, with analyst price targets suggesting another 30% upside over the next year.
