The artificial intelligence (AI) revolution continues to reshape entire industries at a blistering pace. Market leaders are leveraging AI technology to solve complex problems, automate processes, and create entirely new business models that were impossible just a few years ago.
The recent emergence of sophisticated AI models from tech leaders like OpenAI, Alphabet, and Anthropic has catapulted AI into everyday use. These advancements are driving unprecedented demand for AI-related products and services across the technology sector.
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Let’s dive into three compelling AI stocks that stand out as particularly attractive investments in February.
Securing the digital future with AI
Palo Alto Networks (NASDAQ: PANW) powers enterprise cybersecurity by embedding AI across its entire security platform. The company protects critical infrastructure for over 80,000 enterprise customers worldwide, using AI to anticipate and block cyber threats, aiming for real-time prevention.
Palo Alto Networks stock commands a breathtaking forward price-to-earnings (P/E) ratio of 58.8, more than double the S&P 500 multiple of 24. While this premium valuation reflects high growth expectations, the company has backed it up by delivering shareholders a stellar 371.3% return over the past five years.
Palo Alto Networks leverages AI to analyze an immense volume of security events daily — a scale far exceeding the capabilities of human analysts. This fact highlights the essential role of AI in modern cybersecurity.
Toward the end of February, Palo Alto Networks will release its fiscal Q2 2025 earnings covering the period through Jan. 31. Wall Street expects strong enterprise spending on AI security tools to drive results. With cybersecurity spending showing no signs of slowing, this upcoming earnings announcement could provide a powerful catalyst for the stock.
Revolutionizing lending through AI
Upstart (NASDAQ: UPST) transforms traditional lending by deploying AI across the loan approval process. The company’s platform evaluates over 1,600 unique data points to assess borrower creditworthiness, aiming to provide lenders with deeper insights than conventional FICO scores alone.
Upstart stock commands an eye-popping forward P/E ratio of 69.9, nearly triple the market average. Despite this premium valuation, the company has rewarded early believers with a robust 119% return over the past five years, validating its disruptive approach to credit assessment.
The lending platform’s AI models analyze millions of repayment events daily, continuously refining their predictive accuracy. Each new loan approval strengthens the algorithm’s understanding of credit risk factors traditional models might miss, creating substantial technological barriers to entry.
On Feb. 11, Upstart will release its Q4 2024 earnings results amid heightened interest in AI-powered fintech solutions. With lending markets stabilizing and interest rates potentially moderating over the next 24 months, this earnings announcement could spotlight Upstart’s expanding market opportunity.
Powering the future of AI computing
Nvidia (NASDAQ: NVDA) dominates the AI chip market through its graphics processing units and specialized accelerators. The company’s semiconductors power AI workloads across every major cloud provider, from training large language models to enabling real-time inference at scale.
Nvidia stock carries a surprisingly modest forward P/E ratio of 29. This reasonable valuation looks even more compelling given the company’s staggering 1,930% return to shareholders over the past five years.
The semiconductor giant’s latest AI chips process complex neural networks at unprecedented speeds, enabling breakthroughs like the DeepSeek language model. Each new AI advancement drives demand for more powerful processors, strengthening Nvidia’s position as the backbone of AI infrastructure.
On Feb. 26, Nvidia will announce its Q4 fiscal 2025 earnings results amid surging AI adoption. With data centers racing to expand AI computing capacity, this earnings report could reveal fresh evidence of Nvidia’s accelerating growth trajectory.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $311,343!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,694!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $526,758!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Learn more »
*Stock Advisor returns as of January 27, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. George Budwell has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Upstart. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
