Growth opportunities in the AI sector: two stocks to focus on according to Stifel

The race for AI dominance has taken an unexpected turn. Chinese startup DeepSeek has unveiled a new AI model that is not only affordable, but also runs efficiently on less powerful chips. The development sparked concern in the US stock market and triggered a plunge in stocks as speculation began to spread that China could overtake the United States in AI.

Despite this short-term volatility, new opportunities are emerging, with Stifel, a reputable investment bank, highlighting the AI sector as an area with high growth potential. In a recent report, Tore Svanberg, an analyst at Stifel, highlighted the long-term opportunities that the AI sector offers, particularly in software and data centres.

Monolithic Power Systems $MPWR: Key player in power and chips

One of the companies that Stifel highlights is Monolithic Power Systems (MPWR). This company is known for its specialization in semiconductor-based power electronic systems. Its products, which include power modules, motors, sensors, and battery management systems, are used in a wide range of industries, including optoelectronics, telecommunications, IoT, and AI-enabled data centers.

Stifel analyst Tore Svanberg sees MPWR as a company that is well positioned for growth not only because of its diverse product offering, but also because of the key role it plays in power management for AI infrastructure. Svanberg is confident that the company will continue to grow due to its support of large customers and its focus on efficient solutions for energy systems. In 2025, Svanberg expects 62% growth at MPWR, which would push the stock price to $1,100.

ServiceTitan $TTAN: Innovation in software for tradespeople

Another company that has significant growth potential, according to Stifel analysts, is ServiceTitan, a technology firm that focuses on developing cloud-based software for tradespeople and construction workers. The firm offers platforms focused on customer relationship management, scheduling, marketing and analytics, saving time and costs for more than 100,000 contractors worldwide.

ServiceTitan recently launched new AI-powered tools that include predictive analytics and process automation. The company, which went public in December 2024 via an IPO, has long-term potential thanks to its strong track record and growth in sectors like "Pro & Usage," according to Stifel analyst Terry Tillman. Tillman puts a price target on the stock at $120, representing upside potential of 22.5% within a year.

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