For much of the last two-and-a-half years, optimists have held the reins on Wall Street. Over that time, the ageless Dow Jones Industrial Average, widely followed S&P 500, and growth-centric Nasdaq Composite have all rallied to multiple record-closing highs.

While catalysts have been abundant, such as better-than-expected corporate earnings and Donald Trump's return to the White House (the Dow, S&P 500, and Nasdaq soared during Trump's first term), nothing has been more impactful for the stock market than the rise of artificial intelligence (AI).

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Giving AI software and systems the capacity to reason, act, and evolve without the need for human intervention suggests this game-changing technology will offer utility in most industries. In Sizing the Prize, the analysts at PwC are forecasting a 26% increase in global gross domestic product (GDP) by 2030.

The otherworldly potential of AI isn't lost on Wall Street's analysts. Though most are optimistic for the future, select analysts are looking for a trio of scorching-hot AI stocks to climb by a truly eye-popping 95% to 167% over the next year.

Nvidia: Implied upside of 95%

The first AI stock with potentially jaw-dropping upside, based on the prognostication of one Wall Street analyst, is none other than graphics processing unit (GPU) kingpin Nvidia (NVDA -5.07%). Rosenblatt analyst Hans Mosesmann currently holds the Street-high price target on Nvidia at $220 per share, which would equate to a 95% move higher over the next 12 months, if accurate.

Mosesmann's excitement likely stems from Nvidia's tangible moat as the preferred GPU supplier of AI-accelerated data centers. Demand for the company's Hopper (H100) chip and successor Blackwell GPU architecture has been phenomenal, with Blackwell generating $11 billion in sales during the fiscal fourth quarter (ended Jan. 26, 2025). It's the fastest ramp of a new product in the company's storied history.

What's more, Mosesmann has previously pointed out the role CUDA has played in keeping clients loyal to the Nvidia ecosystem. CUDA is the toolkit developers rely on to maximize the computing potential of their GPUs and build large language models, among other functions.

However, even Wall Street's AI darling has potential headwinds it's contending with.

An undeniable uptick in competition is something that could keep Nvidia far away from Mosesmann's price target. Aside from external competitors, there's the possibility it could lose out on valuable data center real estate due to rising internal competition. Many of Nvidia's top customers by net sales are developing AI chips of their own. Even if these chips lack the computing power of the Hopper and/or Blackwell, they'll be considerably cheaper and more readily accessible.

History is another potential headwind for Nvidia. Although AI is humming along at the moment, we haven't witnessed a next-big-thing technology avoid a bubble-bursting event early in its existence for more than three decades. While AI has plenty of long-term utility, most businesses are nowhere close to optimizing this technology or generating a positive return on their AI investments. That's worrisome for Nvidia, which generated 88% of its net sales last year from its rapidly growing data-center segment.

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SoundHound AI: Implied upside of 167%

A second magnificent AI stock that can absolutely soar over the next year, based on the forecast of one Wall Street analyst, is AI voice recognition and conversational technologies leader SoundHound AI (SOUN -12.01%). Analyst Scott Buck of H.C. Wainwright foresees SoundHound AI heading to $26 per share, which would represent a gain of 167% from where the stock closed on March 7.

Buck's optimism ties into the belief that SoundHound AI will be successful in building an AI voice ecosystem. While the company has its proverbial fingers in a host of industries, Buck believes the real value will come from tying some of these industries together and creating an ecosystem.

For instance, AI voice integration in next-generation vehicles can tie in with select restaurants to generate orders. Buck believes this could result in a flat fee, convenience fee, or earn SoundHound AI some percentage of total sales.

SoundHound AI is also focused on the second wave of the AI revolution, which is agentic AI. Whereas Nvidia laid the groundwork for the evolution of artificial intelligence with its hardware, SoundHound AI is promoting the use of AI as an assistant for consumers and businesses. The company's 85% full-year sales growth in 2024, as well as its current-year revenue forecast suggesting sales might double, implies its agentic AI push is hitting home.

The worry is that SoundHound AI isn't particularly close to becoming profitable. On an adjusted basis, the company's net loss nearly doubled during the fourth quarter and widened by 19% for the full year in 2024. The company's gross margin also notably declined.

Further, SoundHound AI is aggressively investing for its future, which means it's burning through quite a bit of capital. Net cash used in operating and investing activities combined to top $121 million last year, which is up from less than $69 million (combined) in 2023. Even with $198 million in available cash and cash equivalents, as of Dec. 31, SoundHound AI will likely need more dilutive share offerings to raise capital.

Upstart Holdings: Implied upside of 105%

The third AI stock with immense upside over the next 12 months, according to one Wall Street analyst, is AI- and cloud-based lending platform Upstart Holdings (UPST -11.71%). In February, Mizuho's Dan Dolev raised his and his firm's price target on Upstart to $110 per share. If this high-water price target were to come to fruition, existing shareholders would enjoy 105% upside, as of the closing bell on March 7.

What makes Upstart such an exciting company is its potential to disrupt the lending industry. The traditional loan-vetting process can take days or weeks, which is time-consuming and costly to lenders. Upstart's model relies on AI and machine learning (ML) tools to quickly vet most consumer loans, leading to lower costs and happier customers/banks. Upstart closed out 2024 with more than 100 banks and credit unions as partners, and had 91% of its loans fully automated.

Upstart's AI and ML platform is also designed to become more effective over time at assessing creditworthiness. Even though the average credit score for approved loans via Upstart is below the average credit score using the traditional vetting process, data has demonstrated that delinquency rates between the two processes have been similar. In other words, Upstart can safely expand the pool of potential customers for banks and credit unions without worsening their credit profile.

The concern with Upstart is that its lending model hasn't been tested during a true economic contraction. Although its stock was clobbered shortly after the COVID-19 pandemic, it's not clear how well Upstart's lending platform would hold up during a typical recession, which, on average, has lasted 10 months since the end of World War II.

As you can imagine, Upstart is also highly dependent on changes in monetary policy and prevailing interest rates. If the U.S. inflation rate were to meaningfully reaccelerate and force the Federal Reserve's hand, it could heavily weigh on demand for personal loans, which have been Upstart's bread and butter.

It wouldn't be a surprise to see Upstart stock remain highly volatile throughout 2025.