Investing Insights: AI Stocks to Consider Amid Market Uncertainty
Stocks across various industries have faced declines recently, largely due to concerns surrounding President Trump’s tariffs on imports. Investors are particularly unsettled about technology firms, including those heavily reliant on overseas production. The tariffs may impose additional import duties, thereby cutting into profit margins for these companies.
Recently, Trump announced a temporary exemption for electronics products from these tariffs, although this exemption may not last. This uncertainty could weigh heavily on the market. However, history shows that technology firms have navigated similar headwinds successfully, and established companies possess the capability to manage difficult situations and thrive in the long run. Notably, several tech firms are also operating in the artificial intelligence (AI) sector, which is poised for significant growth in the coming years.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Considering that valuations for many top tech companies have decreased, here are two compelling AI stocks to consider adding to your portfolio.
Image source: Getty Images.
1. Advanced Micro Devices
When thinking of AI chips, many might immediately consider Nvidia, but Advanced Micro Devices (NASDAQ: AMD) is also making significant strides in this space. AMD has long been a leader in central processing units (CPUs), the primary processors for computers. Recently, the company has sharpened its focus on the data center business, supplying both CPUs and graphics processing units that serve the AI market.
In the past year, AMD’s EPYC processor and AMD Instinct accelerator contributed significantly to data center gains, allowing annual revenue to nearly double. The data center sector’s revenue surpassed $12 billion, with CEO Lisa Su highlighting “clear opportunities for continued growth” driven by the company’s offerings and robust AI demand.
Despite Nvidia’s prominent position, the market still has room for AMD to succeed. Companies applying AI to real-world challenges require extensive computing power for tasks like training and inference, suggesting they might not depend solely on a single provider.
As of today, AMD is trading at around 20 times forward earnings estimates, a notable decrease from approximately 28 earlier this year. This presents an appealing entry point for a stock strategically aligned to take advantage of the ongoing AI boom.
2. Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is another notable player in the AI arena, though it does not lead in cloud computing—its Google Cloud service ranks third behind Amazon‘s AWS and Microsoft‘s Azure. Nonetheless, Google Cloud is a significant entity with double-digit quarterly growth, benefiting from the rising demand in AI.
In its latest quarter, Google Cloud generated $12 billion in revenue, marking a 30% increase driven by heightened AI-related demand. Alphabet’s growth trajectory is likely to continue as it expands its cloud services; in the previous year, the company initiated work on 11 new cloud regions and data centers in the U.S. and internationally.
Beyond Google Cloud, Alphabet consistently earns substantial revenue from its Google Search platform, maintaining its position as the world’s primary search engine. This strong revenue stream contributes to the overall growth of the company.
In the past year, Alphabet stock has traded at around 24 times forward earnings estimates at its peak; however, it is currently valued at just 17 times forward earnings. Given this pricing and Alphabet’s potential as AI demand rises, the company presents an attractive buying opportunity right now.
Should you invest $1,000 in Advanced Micro Devices right now?
Before making an investment in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team has identified what they believe are the 10 best stocks for investors at this time, and Advanced Micro Devices wasn’t one of them. The selected stocks have the potential to deliver significant returns in the coming years.
For example, when Netflix was highlighted on December 17, 2004, a $1,000 investment made at that time would be worth $518,599 today! Similarly, Nvidia appeared on the recommendation list on April 15, 2005, and a $1,000 investment back then would now amass $640,429.
It’s also noteworthy that Stock Advisor’s total average return stands at 791%—significantly surpassing the 152% return of the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of April 14, 2025.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, serves on The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is also a board member. Adria Cimino has positions in Amazon. The Motley Fool maintains positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool also recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
