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After weeks of market turbulence driven by tariff headlines, investor focus is shifting back to one of the strongest secular growth stories of this cycle: artificial intelligence. With geopolitical concerns easing and volatility subsiding, AI stocks are once again gaining traction, and the setup looks increasingly favorable.
The AI boom hasn’t lost steam; in fact, adoption is accelerating across cloud infrastructure, enterprise software, and national defense. For investors looking to re-enter the theme, Microsoft (MSFT), Nvidia (NVDA) and Palantir (PLTR) stand out as three of the most compelling ways to gain exposure.
Below, we’ll look at why these stocks are leading the charge, and the technical levels that matter most right now.
Image Source: Zacks Investment Research
Microsoft: Best Performing Magnificent 7 Stock
Microsoft has quietly emerged as the top-performing Magnificent 7 stock year-to-date, thanks to a combination of strong fundamentals and lower exposure to ongoing tariff risks that continue to weigh on some of its peers. Unlike Apple or Amazon, Microsoft’s business is less reliant on hardware supply chains or consumer goods, making it a relatively insulated play in today’s uncertain macro environment.
Fueling the company’s momentum is its deep integration with OpenAI, as well as surging demand for cloud services driven by AI adoption. Microsoft’s Azure platform posted the fastest growth among the “Big Three” cloud providers, outpacing both Amazon Web Services (AWS) and Google Cloud, thanks in large part to enterprise customers ramping up AI-related workloads.
Technically, the stock looks strong. Following its recent earnings report, Microsoft gapped higher and broke out of a long-term bull flag pattern, a bullish continuation signal. As long as shares hold above the $420 breakout level, the trend remains intact, and Microsoft should continue to lead the market’s next leg higher.
Image Source: TradingView
Palantir: Specialized Stock Exposure to AI Trend
Palantir Technologies has been one of the top-performing stocks in the market over the past two years, riding the wave of AI enthusiasm with its unique position at the intersection of defense, government, and enterprise data analytics. Its business model, which is focused on mission-critical software for some of the world’s most sensitive operations is truly one-of-a-kind, and that uniqueness is reflected in its ultra-premium valuation, currently north of 200x forward earnings.
While the stock has been volatile, it’s consolidating in a constructive pattern. Palantir is currently forming a nested bull flag, with support around $108 and resistance near $125. A breakout above $125 would likely signal a continuation of its powerful uptrend and could set the stage for the next major move higher. However, if the stock breaks below $108, a retest of much lower support near $70 may come into play.