Artificial Intelligence Boom Continues to Run; Top AI Stock Picks Revealed

In 2025 the big tech companies are expected to put in more than US$300 billion into AI Capex. This covers data centres, cloud platforms and also advanced computing systems. NEXTDC, Megaport, NVIDIA and Microsoft look in strong place to take advantage of this as they have solid balance sheets, excellent business models and play leading roles in AI infrastructure, connectivity and applications.

Top ASX AI Stock Picks

NEXTDC Limited (ASX: NXT)

Megaport Limited (ASX: MP1)

NVIDIA Corporation (NASDAQ: NVDA)

Microsoft (NASDAQ: MSFT)

NEXTDC Limited (ASX: NXT)

NEXTDC Limited posted strong results in FY25 as AI demand pushed growth in its sites. Net revenue went up 14% to A$350.2 million while underlying EBITDA rose 6% to A$216.7 million. Contracted use jumped 42% to 244.8MW and billing use climbed 29% to 110.9MW. The company now has a record order book of 134MW with about 85% of that likely to turn into revenue by FY27. Even though it showed a statutory net loss of A$60.5 million because of higher depreciation and finance charges, the balance sheet stayed solid with A$5.5 billion in liquidity and net debt of A$904 million. Big expansion works are going on like M3 Melbourne upgrade to 200MW and M4 Melbourne to 150MW. On the global side KL1 in Kuala Lumpur is expected in FY26 and TK1 in Tokyo around FY30. For FY26, the company guides net revenue between A$390–400 million and EBITDA between A$230–240 million.

Megaport Limited (ASX: MP1)

Megaport Limited had a strong FY25 as more companies increased their use of AI, cloud and data connectivity across its global network. Its revenue went up 16% to A$227.1 million. The number of big customers with ARR above A$100k grew 18% to 629 while Net Revenue Retention stayed steady at 107%. Normalised EBITDA was A$57.0 million while statutory EBITDA came in at A$62.3 million at 27% margin. Operating cash inflows rose 32% to A$68.2 million and net cash was up 43% to A$87.8 million with cash at bank reaching A$102.1 million. The company expanded quickly adding 115 new data centres and now has 983 worldwide. It rolled out AI Exchange with more than 30 providers. For FY26 the company expects revenue between A$260–270 million which means 15–19% growth and EBITDA margin to be in range of 18–20% showing continued spending new products and network expansion.

NVIDIA Corporation (NASDAQ: NVDA)

NVIDIA Corporation reported another strong quarter for the period ending 27 July 2025. This was mainly because of its lead in AI and data center markets. Revenue went up 56% year on year to US$46.7 billion with Data Center division alone adding US$41.1 billion which is also 56% higher because of heavy demand for Blackwell GPUs and accelerated computing platforms.Net income reached US$26.4 billion compared to US$16.6 billion in same quarter last year and operating income was US$28.4 billion. Cash flow from operations stayed strong at US$42.8 billion in first half of FY26 giving the company liquidity of more than US$11.6 billion cash and US$45.2 billion in marketable securities. NVIDIA kept returning money to shareholders with US$9.7 billion stock buybacks and US$244 million dividends during the quarter. The company also launched Blackwell Ultra (GB300) and expanded AI infrastructure partnerships worldwide. 

Microsoft (NASDAQ: MSFT)

Microsoft had a very strong FY25 with revenue going up 15% to US$281.7 billion. This growth came from all its business segments. Intelligent Cloud was the biggest driver with revenue jumping 21% to US$106.3 billion mainly because Azure grew 34%. Productivity and Business Processes also did well rising 13% to US$120.8 billion helped by Microsoft 365 Commercial. More Personal Computing showed 7% growth to US$54.6 billion with support from Xbox and search ads. Net income increased 16% to US$101.8 billion and operating income rose 17% to US$128.5 billion. Gross margin improved 13% to US$193.9 billion although cloud margins were a bit weaker due to scaling of AI infrastructure. Operating cash flows stayed strong with careful cost control and capital allocation had both dividends and share buybacks. Microsoft is pushing hard on AI with Copilot rolled out across 365, LinkedIn and big money going into AI infrastructure along with gaming after buying Activision Blizzard. The outlook is positive as cloud and AI demand is expected to keep driving long term growth.

(Source: Company Announcements)