Top AI Stocks to Buy Right Now
The Nasdaq Composite has been climbing steadily for over two years. This surge has been fueled by advancements in artificial intelligence (AI), a U.S. Presidential election, lower inflation, and anticipated interest rate cuts. After a 43% jump in 2023, the tech-heavy index has already risen 33% in 2024.
Historical data points to further growth ahead. Since 1972, in years following 30%-plus gains, the Nasdaq has risen 19% on average. This pattern suggests the rally could extend into 2025.
AI’s Growing Economic Influence
Recent AI advancements have boosted investor optimism. PricewaterhouseCoopers estimates that generative AI could add $15.7 trillion to the economy by 2030. This immense potential presents lucrative opportunities for leading AI players.
Here are 10 AI stocks worth considering as the Nasdaq prepares for another potential upswing:
1. Nvidia (NASDAQ: NVDA)
Nvidia dominates AI processing with its powerful GPUs, essential for gaming, cloud computing, and machine learning. The rapid adoption of generative AI has skyrocketed demand for its products. Despite delivering five quarters of triple-digit growth, Wall Street expects 50% growth next year. Nvidia’s upcoming Blackwell processors and accelerated product releases highlight its innovative drive. Priced at 31 times next year’s earnings, the stock remains attractive.
2. Palantir Technologies (NASDAQ: PLTR)
Palantir’s AI Platform (AIP) capitalizes on its two decades of AI expertise. Boot camps pairing clients with engineers have driven a surge in deals, with U.S. commercial revenue growing 54% year over year. Palantir closed 104 large deals, including 16 worth over $10 million. Its forward PEG ratio of 0.65 underscores its value as an investment.
3. Microsoft (NASDAQ: MSFT)
Microsoft’s investment in OpenAI and integration of ChatGPT into its tools sparked the AI boom. Its AI assistant suite, Copilot, could generate $100 billion in revenue by 2027. Azure Cloud, a key AI driver, grew 30% in fiscal 2024. Microsoft is also addressing adoption challenges by offering ROI tools and reducing AI costs. Trading at 33 times forward earnings, it’s well-positioned for growth.
4. Broadcom (NASDAQ: AVGO)
Broadcom’s chips power the infrastructure behind AI data centers. Management forecasts a 500% growth in AI revenue by 2027. Recently, it added hyperscale customers to develop custom AI accelerators, enhancing its growth prospects. With a PEG ratio of 0.09, Broadcom offers exceptional value.
5. Arm Holdings (NASDAQ: ARM)
Arm licenses designs for CPU and GPU cores integral to AI processing. Nvidia’s Grace Hopper Superchip, using 144 Arm V9 cores, demonstrates Arm’s importance in AI. With a PEG ratio of 0.87, Arm’s growing role in AI makes it a strong contender.
6. Taiwan Semiconductor Manufacturing (NYSE: TSM)
As the largest semiconductor foundry, TSMC produces chips for Nvidia, Arm, and Broadcom. AI processor revenue is expected to triple this year, representing 15% of its total revenue. With new facilities boosting capacity, TSMC is well-equipped for demand. The stock, trading at 28 times next year’s earnings, is attractively priced.
7. Alphabet (NASDAQ: GOOGL)
Alphabet has long utilized AI to improve search relevance and advertising. Its generative AI advancements include Gemini 2.0, which powers AI tools like Astra and Mariner. Google Cloud, featuring Vertex AI, is a fast-growing segment. At 25 times earnings, Alphabet is a cost-effective option for AI investment.
8. Amazon (NASDAQ: AMZN)
Amazon’s AI tools, such as Bedrock AI and custom chips Inferentia and Trainium, enhance its cloud offerings. Its leadership in machine learning features strengthens its AI position. Amazon also benefits from economic recovery, boosting e-commerce and advertising. Trading at 3 times forward sales, it offers solid value.
9. Meta Platforms (NASDAQ: META)
Meta’s LLaMA AI model has become a cornerstone for generative AI applications. Its free offering to users and licensing agreements with major companies highlight its broad appeal. Meta’s digital advertising also stands to gain from economic improvement. At 28 times earnings, the stock remains a bargain.
10. Tesla (NASDAQ: TSLA)
Tesla’s potential lies in autonomous driving and the robotaxi market, estimated at $28 trillion over the next decade. Although expensive at 173 times forward earnings, its innovative self-driving technology and industry leadership could make it a game-changer.
Seize the Opportunity Before It’s Too Late
If you’re worried about missing out, now might be the perfect time to act. History favors the bold investor, and the surge in AI adoption could make 2025 a pivotal year for these stocks.
