AI Technology Drives Growth: Top Investment Picks in 2025
An updated edition of the April 7, 2025 article.
Artificial Intelligence (AI) empowers machines to analyze large datasets, identify patterns, and make decisions independently. It addresses real-world problems across various sectors, including customer service (via chatbots), medical diagnostics, fraud detection, autonomous vehicles, and personalized recommendations. Advances in computing hardware, particularly GPUs and TPUs, facilitate the creation of increasingly complex AI models.
The Rise of AI and Its Applications
AI’s popularity is soaring due to multimodal learning and enhanced context awareness. The introduction of Generative AI (Gen AI) and Agentic AI significantly boosts its capabilities, positioning AI as a pivotal force in efficiency, automation, and innovation. Industries like robotics, healthcare, finance, cybersecurity, and e-commerce are evolving, leveraging AI’s ability to replicate human intelligence through machine learning, deep learning, and natural language processing. Agentic AI is introducing advanced agents capable of reasoning and learning from interactions with customers.
Investment Opportunities in AI Technology
Businesses are swiftly integrating AI into their applications to tackle complex challenges. Companies like Cognizant Technology Solutions (CTSH) are leading the charge. Alphabet (GOOGL) is embedding AI into its search functionalities. Notable U.S. tech firms, including Microsoft (MSFT), Amazon (AMZN), Google, and Meta Platforms (META), are at the forefront of AI advancements, supported by high-performance AI chips from NVIDIA (NVDA) and technological solutions from Lam Research (LRCX).
3 AI Stocks to Buy Right Now
Microsoft is reaping the benefits of integrating AI across its services, boasting over 60,000 Azure AI customers. The Azure AI Foundry platform has gained traction among developers at more than 70,000 enterprises and startups. This Zacks Rank #2 (Buy) company’s Azure AI Agent Service has been utilized by over 10,000 organizations to build and scale agents. Microsoft’s Phi small language models have been downloaded 38 million times, and GitHub Copilot has processed over eight million code review requests, expanding its user base to more than 15 million.
Microsoft Copilot enhances employee productivity, potentially saving up to 10 hours per month according to the Work Trend Index. The company is extending these capabilities to its full range of products, including Windows, Microsoft 365, Microsoft Teams, and Edge.
Lam Research specializes in etch and deposition technology essential for high-bandwidth memory (HBM) production and AI workloads. LRCX is poised to benefit from the escalating demand for AI and data center chips, leveraging its advanced fabrication technologies. Its ALTUS ALD tool uses metal molybdenum for precise depositions that enable chipmakers to produce memory and logic chips suitable for AI applications.
Investments in research and development indicate Lam Research’s commitment to remaining competitive in the growing wafer fabrication equipment market.
Cognizant Technology Solutions, another Zacks Rank #2 company, is thriving due to increased spending from clients on cloud and data modernization initiatives, alongside building foundations for AI-led innovation. In Q1 2025, Cognizant engaged in over 1,400 Generative AI projects with various clients.
The company continues to invest in AI-based software engineering, advancing products into intelligent, connected, and autonomous solutions. Cognizant anticipates AI-generated code to surpass 20% of its output in early 2025.
In partnership with leading tech firms like Microsoft, Amazon, and Google, Cognizant launched an AI-driven dispute management solution, enhancing dispute resolution for mid-market banks in North America using ServiceNow’s technology. Additionally, Cognizant is incorporating NVIDIA’s AI technology across various fields, including enterprise AI agents and smart manufacturing, through its Neuro AI platform, which is expected to propel transformation in their business processes.
