Top AI Stocks to Consider in February: Nvidia, Meta, and Alphabet Shine

Artificial intelligence (AI) investing remains a dominant theme in today’s market. Investors should stay informed about which stocks are promising purchases each month and identify those that may have become overvalued and should be sold or steered clear of.

For February, I have highlighted three standout stocks to consider buying and one that does not measure up.

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Strong AI Fundamentals for Nvidia, Meta Platforms, and Alphabet

Nvidia (NASDAQ: NVDA), Meta Platforms (NASDAQ: META), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) are at the top of this month’s buy list.

Nvidia continues to be a robust investment choice, bolstered by encouraging signals from its key customers suggesting that 2025 could be a breakthrough year. The company specializes in GPUs (graphics processing units), essential components in most advanced AI models, and they are vital when these models are activated.

Major firms like Alphabet, Meta Platforms, Microsoft, and Amazon anticipate significant capital expenditures this year in response to the increasing demand for AI. While these companies develop their computing chips, they still rely heavily on GPUs, making Nvidia a desirable stock.

Meta Platforms is one of the leading investors in AI, benefiting from solid cash flows. Its primary revenue comes from social media platforms like Facebook and Instagram. In the fourth quarter of the previous year, this business generated $46.8 billion in revenue with a remarkable 61% operating profit margin.

This financial strength allows Meta to nurture its AI initiatives, with CEO Mark Zuckerberg predicting that 2025 will see a transformative advancement. He envisions creating an engineering AI agency that can problem-solve effectively, resembling the skills of a competent mid-level engineer — a potential game-changer for the company.

Meta’s stature in AI solidifies its position as one of the strongest stocks in the market.

Similar to Meta, Alphabet primarily operates in advertising while integrating AI technologies into its business. The company has incorporated its AI tool, Gemini, into its advertising services, keeping it competitive even if its generative AI isn’t leading the pack.

Moreover, Alphabet’s Google Cloud platform continues to attract clients seeking computing resources without the overhead of building their servers. This trend is stimulating impressive growth for the company, with its cloud revenue rising 30% in the fourth quarter.

Avoiding Broadcom This Month

Broadcom (NASDAQ: AVGO) is one AI stock I will not be investing in this February, as it does not rank alongside the other three contenders.

While Broadcom does benefit from tailwinds in AI with its AI accelerator and connectivity products, these areas do not generate enough revenue to compensate for weaknesses in its traditional business. Its significant acquisition of VMware continues to face challenges, with reports of price increases exceeding 1,000% for its products.

Consequently, Broadcom lags behind its competitors and trades at a higher valuation than each of them, despite weaker growth prospects.

On a forward price-to-earnings (P/E) basis, Broadcom stands as the most expensive among the group.

NVDA PE ratio (forward), data by YCharts.

A premium could be justified if Broadcom experienced rapid growth or had significant upcoming developments. Currently, that’s not the case.

Each of these four firms maintains a different fiscal calendar, complicating direct comparisons. However, we can look at projected revenues for the next quarter as a baseline.

NVDA revenue growth estimate for current quarter, data by YCharts.

Even though Broadcom is growing quicker than Meta or Alphabet, its growth rate does not justify its premium valuation relative to these two companies. Nvidia, showcasing significantly faster growth, trades at a lower valuation compared to Broadcom.

Broadcom may become a more attractive AI stock in the future, but for now, I favor Nvidia, Meta Platforms, and Alphabet as better investments for February.

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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, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is also on The Motley Fool’s board. Suzanne Frey, an executive at Alphabet, is part of The Motley Fool’s board. Keithen Drury has positions in Alphabet, Amazon, and Nvidia. The Motley Fool recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has also disclosed positions in Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. For additional details, please refer to The Motley Fool’s disclosure policy.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.