Three Promising AI Stocks to Consider for Future Growth
In the last decade, the transformative potential of artificial intelligence (AI) has become evident across various sectors. Businesses now leverage AI to automate repetitive tasks, analyze vast data sets, and forecast trends, leading to a significant surge in AI-related stock prices.
A standout performer in this space has been Nvidia (NASDAQ: NVDA), the leading supplier of graphics processing units (GPUs) fundamental for AI operations. However, investors should also pay attention to other companies poised to benefit from this growth. Notable mentions include Advanced Micro Devices (NASDAQ: AMD), Super Micro Computer (NASDAQ: SMCI), and The Trade Desk (NASDAQ: TTD). These companies appear well-positioned to navigate current economic challenges and gain traction over the coming years.
1. Advanced Micro Devices (AMD)
Although often overshadowed by Nvidia, AMD ranks as the world’s second-largest producer of x86 central processing units (CPUs) and discrete GPUs. The company’s offerings include data center GPUs designed for complex machine learning tasks, which are increasingly crucial in the AI landscape.
In 2017, AMD introduced its first line of Instinct GPUs for data centers. The latest MI325X Instinct GPUs, set to launch in late 2024, boast memory capacity, bandwidth, and AI compute performance that surpasses Nvidia’s H200 GPU. Additionally, AMD plans to release its more advanced MI350 and MI355X GPUs this year.
AMD’s Instinct GPUs are priced roughly 50% lower than Nvidia’s equivalents, making them an appealing option for cost-conscious enterprises looking to expand their AI capabilities. Furthermore, AMD’s Epyc CPUs are gaining traction against Intel’s Xeon CPUs. As a result, AMD’s data center sales soared by 57% year over year, representing 49% of its overall revenue. Meanwhile, AMD’s Ryzen CPU sales for PCs also increased, pulling original equipment manufacturers (OEMs) from Intel.
For 2025, analysts forecast a 21% rise in AMD’s revenue and a 33% increase in adjusted earnings per share (EPS). While challenges like tariffs and trade wars loom, AMD maintains a reasonable valuation at 24 times forward earnings. Should these obstacles ease, AMD could experience substantial growth over the next few years.
2. Super Micro Computer (SMCI)
Super Micro Computer, commonly referred to as Supermicro, specializes in liquid-cooled AI servers dedicated to processing AI applications. Their close partnership with Nvidia ensures a reliable supply of high-end GPUs, while they are also expanding their offerings with AMD GPUs.
Although Supermicro remains a smaller player in the traditional server market, their focus on AI servers has allowed them to carve a niche. KeyBanc Capital Markets estimates that Supermicro may have more than doubled its AI server market share from 10% in 2023 to 23% in 2024.
For fiscal 2025, analysts predict a 57% increase in Supermicro’s revenue, although adjusted EPS may only rise by 2% due to challenges such as delayed customer purchases and declining gross margins. However, expectations for fiscal 2026 project revenue and adjusted EPS growth of 41% and 56%, respectively. Supermicro’s share price trades at 14 times forward earnings, indicating potential for high growth.
Concerns surrounding delayed 10-K filings and regulatory investigations have affected Supermicro’s valuation. Yet, as these issues are resolved and the AI market stabilizes, the company could see an appreciable increase in valuation.
3. The Trade Desk (TTD)
The Trade Desk operates the world’s largest independent demand-side platform for digital ads, facilitating the sale of advertising space across desktop, mobile, and connected TV (CTV) platforms. The company enables advertisers to escape the constraints of platforms like Alphabet and Meta Platforms and maximize their reach across the open internet. Recent growth has been largely fueled by ad-supported streaming services.
Even though The Trade Desk is primarily an ad tech company, its Solimar platform utilizes AI algorithms to enhance targeted advertising by collecting first-party data and improving performance metrics. The introduction of a new Unified ID 2.0 solution to replace traditional cookies and the development of a proprietary operating system, Ventura, for smart TVs adds further depth to its competitive edge.
For 2025, analysts anticipate a revenue increase of 17% and a 6% rise in adjusted EPS for The Trade Desk, despite some adverse effects from tariffs influencing ad spending. The stock currently trades at 50 times forward earnings, reflecting its position as a key player in the growing automated advertising market powered by AI.
Conclusion
Investors considering a $1,000 investment in Advanced Micro Devices should weigh the company’s prospects against broader market conditions.
Consider that the Motley Fool Stock Advisor analyst team has identified what they believe are the 10 best stocks for current investment, although Advanced Micro Devices was not included on that list. Historical examples, like investments in Netflix and Nvidia at earlier points, illustrate the potential for significant returns in tech investments.
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The views expressed herein are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.
