According to Wedbush Securities senior analyst Dan Ives, the “AI party” is far from over. It is “the biggest tech transformation in over 40 years,” and the current surge in generative artificial intelligence has triggered a global race among leading firms to build out and deploy new technology.

Hyperscalers are expected to be the biggest beneficiaries since cloud growth is yet to see a slowdown. Since 2022, many on the Street have been talking about a significant slowdown in cloud businesses, and not only has such a slowdown failed to materialize, but cloud computing is only accelerating. The record AI-focused capex that companies have planned for this year could push hyperscalers even higher. 

Here are three hyperscaler stocks to consider before that happens:

Hyperscaler Stock #1: Amazon

Amazon (AMZN) could not only see benefits from the current U.S.-China tariff pause and potential trade deals, but also a surge in AI spending. There’s no doubt this company is going to be among the biggest winners if the ongoing AI boom sticks around.

Amazon’s AWS has the leading market share of all cloud computing firms, and Amazon keeps investing in its success. The company plans to spend $100 billion this year, which is more than any other Magnificent 7 company. It also has investments in Anthropic, which many consider to have the best AI model for programming.

AMZN stock has pulled back from its highs by around 13%, but the fundamentals are as solid as ever. 

The mean price target at $241.46 implies 15% upside potential. It could overshoot this consensus target easily if cloud momentum keeps up.

Hyperscaler Stock #2: Alphabet

Alphabet (GOOGL) has a significant amount of upside potential from here based on the company’s AI moves. 

It has recently released an updated version of Gemini 2.5 Pro, which has received positive feedback. The stock has seen selloffs this year due to fears of Google losing its edge in the search engine business. Those fears are warranted, since Apple (AAPL) said recently that it has seen a drop in search queries via its Safari browser. Subsequently, GOOG stock fell over 9.2% before staging a recovery.

I think investors are underestimating the potential here. With time, Google has proven it can dominate in the AI space. If it can successfully fully integrate the Gemini model into its search engine soon, it could easily regain the lost market share.

On top of that, the cloud business is still solid. It grew 28% year-over-year to $12.3 billion in Q1. Better yet, it trades at just 17.7 times trailing earnings.

Hyperscaler Stock #3: Microsoft

Microsoft (MSFT) is firing on all cylinders. The stock is up 16.6% in the past month as investors shake off broader macroeconomic concerns that had weighed on shares earlier in 2025. 

This company holds significant sway over OpenAI and its Azure business, and some experts forecast that Azure could take over AWS as the biggest cloud computing company by 2026.

If you have a strong conviction in the AI and cloud story, MSFT is a must-have in your portfolio. The company should also benefit in the long run since it has investments in quantum computing tech, and there are no competitors on the horizon to challenge its software suite that white-collar businesses can’t live without.