2025: A Promising Year for AI Investing

Artificial intelligence (AI) played a crucial role in driving the market upward last year. The performance of AI stocks significantly boosted the S&P 500, Nasdaq, and Dow Jones Industrial Average, each posting impressive double-digit gains. Companies specializing in AI tools and services experienced notable revenue increases, leading to a surge of investment in this sector. The initial growth focused on establishing AI infrastructure and developing models to tackle complex future challenges.

AI Expansion: More Than Just Infrastructure

As we enter 2025, optimism remains high for another successful year for AI as the infrastructure buildout is set to continue. According to Nvidia (NASDAQ: NVDA) CEO Jensen Huang, around $1 trillion worth of computers globally need upgrades for accelerated computing, a process that will take time. Additionally, 2025 might mark the rise of agentic AI—intelligent systems that can reason, devise solutions, and apply them effectively. This advancement could reshape various industries.

Where to invest $1,000 right now? Our analyst team has identified the 10 best stocks to purchase now. See the 10 stocks »

Promising AI Stocks for Your Portfolio

Investing as little as $500 in 2025 may lead to significant opportunities in the AI sector. Below are three top AI stocks worth considering for investment this year.

Image source: Getty Images.

1. Nvidia

Nvidia has emerged as a leader in the AI market and shows strong potential for ongoing success. The company plays a vital role in all stages of AI development, supplying both the chips necessary for training models and the software that applies AI to various business needs.

With robust double and triple-digit revenue growth, Nvidia’s performance is expected to continue on this upward trajectory. The company prioritizes innovation by committing to annual updates for its graphics processing units (GPUs), making it challenging for competitors to catch up. By the time rivals match current offerings, Nvidia is already poised to introduce new products.

Currently, Nvidia is launching its Blackwell architecture, which has reportedly seen “staggering” demand. This could yield billions in revenue during its rollout. Therefore, Nvidia stock may be set for substantial growth in 2025.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stands out as the most affordable among the “Magnificent Seven” tech stocks that have been driving market growth. Trading at 21 times forward earnings estimates, it represents a bargain given its history of earnings progression and solid future prospects.

While most recognize Alphabet for Google Search—the world’s leading search engine—its AI initiatives have also contributed to the growth of Google Cloud, which crossed the $10 billion mark in quarterly revenue and achieved $1 billion in quarterly operating income recently.

Google Cloud generates revenue through AI tools and benefits from its large language model, Gemini, which enhances Google Search and assists advertisers in reaching target audiences. This positions Alphabet for greater success during the ongoing AI boom.

3. Amazon

Amazon (NASDAQ: AMZN), like Alphabet, capitalizes on AI in multiple ways. Not only does the e-commerce giant use AI to streamline its operations, but it also markets AI products through its cloud computing subsidiary, Amazon Web Services (AWS).

Amazon has made considerable investments in AI, which is set to boost its e-commerce profits. For instance, it employs AI tools to optimize its fulfillment processes, such as designing efficient delivery routes.

AWS showed robust results last year, achieving a $110 billion annualized revenue run rate. It focuses on various AI applications, including providing chips for projects and managing services featuring large language models. With new initiatives like Project Amelia, an AI agent for sellers, Amazon is well-positioned to take advantage of the next AI growth surge.

Don’t Miss Your Chance for Potentially Profitable Investments

Have you ever felt like you missed out on investing in top-performing stocks? Now might be a perfect opportunity.

Occasionally, our expert analysts issue “Double Down” stock recommendations for companies expected to see significant growth. If you’ve worried about missing your chance, it could be wise to consider investing now. A few historical examples include:

• Nvidia: Investing $1,000 when we first recommended it in 2009 would have grown to $353,272!
• Apple: A $1,000 investment from 2008 would now be worth $45,049!
• Netflix: A $1,000 investment from 2004 would have skyrocketed to $457,459!

Right now, we’re offering “Double Down” alerts for three remarkable companies, and this may be a rare chance you don’t want to overlook.

See 3 “Double Down” stocks »

*Stock Advisor returns as of January 13, 2025

John Mackey, the former CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is also a member of The Motley Fool’s board. Adria Cimino holds positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool maintains a disclosure policy.

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