Artificial Intelligence Stocks: Top Picks for Future Growth

The excitement surrounding artificial intelligence (AI) propelled the stock market in the previous year, and this trend shows signs of continuing. Currently, we are still at the beginning stages of AI innovation, with companies making significant investments in data centers and AI platforms. There’s much more progress to be made.

Nvidia (NASDAQ: NVDA) CEO Jensen Huang estimates that about $1 trillion worth of old computer systems need updating to harness accelerated computing. Moreover, the actual integration of AI to boost efficiency and create groundbreaking products is still in its infancy. This suggests substantial opportunities for AI-driven revenue growth, meaning 2025 might be another strong year for AI stocks. Let’s explore five businesses to consider as we advance in the AI race.

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1. Nvidia: The AI Chip Leader

Nvidia, regarded as a giant in AI chips, has sparked concerns among investors about the possibility of a slowdown after an astounding 800% stock price increase in the last two years. While predicting stock performance with certainty is impossible, there’s reason for optimism around Nvidia’s future.

The first reason for confidence lies in Nvidia’s position as the leading AI chip manufacturer, supported by a robust ecosystem of AI products and services. The company is committed to continual innovation, and the launch of its Blackwell architecture adds to its appeal.

Secondly, the industry is entering a new phase with the rise of agentic AI, which automates complex, multi-step tasks. Nvidia provides developers with essential tools to create these AI agents, positioning itself to benefit as its customers integrate AI into their operations.

2. SoundHound AI: Emerging in Voice AI

SoundHound AI (NASDAQ: SOUN) is revolutionizing the voice AI sector by translating voice directly to meaning without the intermediate text form. Recently, the company’s revenue shot up by 89% in the last quarter, indicating significant growth potential.

With a total addressable market of $140 billion, SoundHound is just beginning to tap into its possibilities. A year ago, 90% of its revenue came from the automotive industry. Now, five different sectors each contribute 5% to 25% of the revenue, showing that SoundHound is diversifying its customer base.

The rise of agentic AI also stands to benefit SoundHound, presenting opportunities across industries like healthcare, insurance, and travel to enhance efficiency in tasks such as managing appointments and customer inquiries. While shares have appreciated significantly over the past year, they may continue to rise as the company capitalizes on these opportunities.

3. Amazon: A Safer AI Investment

If you seek to invest in AI with lower risk, Amazon (NASDAQ: AMZN) might be your best bet. The company excels in both e-commerce and cloud computing, sectors that contribute to their consistent growth long before AI became prominent.

Amazon’s extensive investments in AI enhance its operational efficiency. For instance, AI optimizes warehouse logistics and powers AI services through Amazon Web Services (AWS). As a result, AWS has achieved a $110 billion annualized revenue run rate. Although Amazon may not deliver dramatic share price increases, its solid foundation makes it an excellent investment opportunity.

4. Meta Platforms: AI and Advertising Fusion

Meta Platforms (NASDAQ: META) has significantly invested in AI, but it primarily generates revenue through its advertising business. With popular platforms like Facebook, Messenger, WhatsApp, and Instagram, advertisers are eager to connect with their audiences.

This strong advertising model has enabled Meta to consistently grow revenues into billions, even allowing dividend distributions to shareholders.

AI complements Meta’s operations by powering its own large language model (LLM), designed to enhance user engagement through AI assistants. This advancement could boost user interaction with Meta’s platforms, intensifying advertisers’ commitments to the company.

Additionally, the ongoing investment in AI could yield new product opportunities and position Meta as a significant player in the AI landscape.

5. Palantir Technologies: Ready for Longer-Term Growth

Palantir Technologies (NASDAQ: PLTR) had a spectacular 2024, achieving record profits, joining the S&P 500, and witnessing shares rise by 340%. There remains potential for further growth, especially in the long run.

Two key growth factors could enhance revenue moving forward. Palantir specializes in helping clients consolidate their data for more effective use. Initially, government contracts comprised most of its business, but commercial client revenue is now expanding rapidly. Just four years ago, its commercial customers numbered around 14, but now they’re close to 300.

The recent launch of Palantir’s Artificial Intelligence Platform (AIP) has driven strong demand. Both the growth in commercial clients and the AIP could significantly boost revenue in the coming quarters, paving the way for more share price increases in 2025 and beyond.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Adria Cimino holds positions in Amazon. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Nvidia, and Palantir Technologies. 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.