Top Tech Stocks for 2025: Why Now is a Smart Time to Invest
Despite some recent market ups and downs, technology stocks remain a strong choice for long-term investments. Factors such as DeepSeek’s launch of a cheaper large language model (LLM) artificial intelligence (AI) interface and ongoing trade tensions between rival nations may be causing temporary price fluctuations. However, this situation presents a prime opportunity to invest in select tech stocks positioned for growth.
1. Nvidia: The AI Leader Stays Strong
Last week, Chinese AI company DeepSeek announced it trained a top-tier LLM for under $6 million, impacting Nvidia (NASDAQ: NVDA). Questions linger about DeepSeek’s product costs and whether they infringe on OpenAI’s models. This news raised doubts about the necessity for Nvidia’s advanced semiconductors.
However, U.S. firms, including Nvidia’s largest client, Microsoft (NASDAQ: MSFT), remain committed to their AI investments. Microsoft is proceeding with $80 billion earmarked for AI infrastructure in 2025, while Meta Platforms (NASDAQ: META) plans to invest $60 to $65 billion this year.
Meta’s CEO, Mark Zuckerberg, believes that investing in AI infrastructure is crucial for gaining a competitive edge, though it may take time to confirm this theory. Similarly, Microsoft CEO Satya Nadella suggests that lowering AI training costs could increase overall AI usage.
Nvidia continues to lead in AI infrastructure as its graphics processing units (GPUs) are essential for training LLMs. The newest LLMs often require ten times more GPUs for training than before. If new models cost significantly more, but DeepSeek can slash training expenses, this could maintain stable training costs and potentially lead to more models being developed—ultimately benefiting Nvidia.
The current valuation of Nvidia is appealing, with a forward price-to-earnings (P/E) ratio of 21, based on 2025 estimates, and a forward price-to-earnings-to-growth (PEG) ratio of about 0.4, indicating it is undervalued.
Image source: Getty Images.
2. Taiwan Semiconductor Manufacturing: Positioned for Growth
Taiwan Semiconductor Manufacturing (NYSE: TSM), often known as TSMC, is another tech stock that has become less expensive amid market volatility fueled by DeepSeek and tariff concerns. As the world’s leading advanced chip manufacturer, TSMC is well-positioned to benefit from ongoing data center and AI development.
TSMC plays a crucial role in the semiconductor industry, utilizing its cutting-edge 3-nanometer and 5nm technologies to create advanced chips for companies like Nvidia and Apple. The company’s expertise and scale grant it significant pricing power, anticipated to lead to price hikes in 2025.
This has resulted in strong revenue growth, with TSMC’s revenue climbing 37% year over year to $26.9 billion in Q4. Its gross margin improved by 600 basis points to 59%, meaning more revenue contributes to profit. Increasing chip demand, rising prices, and expanding gross margins signal a bright future for TSMC.
TSMC currently trades at a forward P/E of 19 and a PEG of about 0.8, making it an attractive investment.
3. Meta Platforms: Innovating for the Future
Meta Platforms is a key player in digital advertising, leveraging its social media and messaging apps to reach users. The company is investing heavily in AI to enhance user engagement and improve the targeting of advertisements.
Recent results show that this strategy is paying off; Q4 ad revenue jumped 21% year over year to $46.8 billion. Despite recent challenges, Meta continues to grow its user base, which increased 5% last quarter, and profits per user rose 16% to $14.25.
Meta excels in monetizing its platform by keeping users engaged and targeting them effectively through its advertising system. Last quarter, ad prices jumped 14%, reflecting rising demand due to strong ad performance. Simultaneously, the number of ads served across its platforms increased by 6%.
The company aims to develop Threads into its next major platform, having accrued 320 million monthly active users by the end of 2024, growing at a rate of 1 million users daily. Furthermore, Meta plans to enhance its Llama LLM, aiming to create a leading AI assistant with advanced features.
Investors can buy into this digital advertising and AI leader with a low forward P/E of just 24.
Don’t Miss Out on Investing in Leading Tech Stocks
Have you ever felt like you missed an opportunity to invest in successful stocks? Here’s your chance to consider investing now.
Our analysts occasionally issue “Double Down” recommendations for companies poised for significant growth. If you’ve been hesitant, now may be the right time to act before the opportunity slips away. Consider these impressive returns:
- Nvidia: Investing $1,000 when we doubled down in 2009 would now be worth $323,686!*
- Apple: A $1,000 investment in 2008 would now amount to $44,026!*
- Netflix: In 2004, a $1,000 investment would have grown to $545,283!*
We are now issuing “Double Down” alerts for three exceptional companies, making this a timely opportunity you won’t want to overlook.
Learn more »
*Stock Advisor returns as of February 3, 2025
Randi Zuckerberg, a former director of market development at Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors.
Geoffrey Seiler has no position in any of the mentioned stocks. The Motley Fool recommends and has stakes in Apple, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool also recommends options including long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool follows a disclosure policy.
The views expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.
