AI Stocks Poised for Further Growth in 2025 Amid Evolving Tech Landscape

Wall Street Analyst Dan Ives Sees Tech Stocks Jumping Another 25% in 2025. Time to Buy? | The Motley Fool

Arguably, there's been no bigger bull in the artificial-intelligence (AI) rally than Wedbush's Dan Ives. Ives has been cheerleading the AI boom since shortly after the debut of ChatGPT. In February 2023, the analyst said an AI arms race was shaping up following the launch of the generational AI chatbot. That statement has been borne out, as Nvidia has raced ahead among chip stocks, fending off recent challenges from AMD and Intel. In addition, cloud infrastructure companies such as Microsoft, Alphabet, Amazon, and Oracle are rapidly buying Nvidia components to serve the AI demands of their own customers. Ives' prediction that tech stocks would gain 20% in 2023 was also accurate, as the tech-heavy Nasdaq index finished up 24%. He also called 2024 the "year of AI," saying that tech stocks would jump 25%. That was also correct. Now, Ives is banging the drum for tech stocks to continue to rise in 2025, driven by the AI boom. In a recent post on X, Ives predicted that stocks would jump 25% in 2025, building on its gains over the past two years. Ives has argued before that the AI boom will take the form of a multiyear rally in the stock market, much like the dot-com boom of the 1990s, which lasted for five years before ending in a crash. Despite some concerns that an AI bubble may be forming, signs are generally pointing to a continued rally in AI stocks. First, revenue and profit are likely to continue to soar as stocks like Nvidia are still reporting rapid growth, and other stocks are joining the AI rally, including Micron and now a number of software companies. There are also larger macro trends that could drive tech stocks higher. In particular, Ives noted a benefit from Lina Khan's stepping down as head of the Federal Trade Commission. Khan has led several high-profile lawsuits against big tech companies, and the regulatory framework is expected to be friendlier to big business under President Trump. In addition, investors seem to be anticipating support from the new administration for AI initiatives, as tech stocks jumped following the election. Meanwhile, the race to artificial generative intelligence is well under way, and as long as companies such as OpenAI are working toward achieving that goal, spending on cybersecurity is likely to remain strong. Tech stocks are coming into 2025 with a lot of momentum, but the biggest risk factor at this point is the valuation. The Nasdaq is up more than 50% over the past two years, and it's now about as expensive as it's been at any point since the dot-com bubble. The Invesco QQQ Trust (QQQ -0.85%), which tracks the Nasdaq 100, or the 100 most valuable Nasdaq stocks, now trades at a price-to-earnings (P/E) ratio of 35, and many of the "Magnificent Seven" stocks that make up much of the value of the Nasdaq seem inflated. Apple, for example, now trades at a P/E of 41, and its market cap is approaching $4 trillion, even as revenue is expected to grow by only mid-single digits this year. Ives' bullishness isn't unreasonable, as spending on capital infrastructure to support AI is likely to increase. But with valuations already looking stretched, achieving another 25% increase for the Nasdaq won't be so easy. Rather than piling into tech stocks on autopilot, a better strategy would be tactfully investing in this industry. Either wait for pullbacks in specific stocks after doing due diligence in the underlying business, or buy ETFs such as the Invesco QQQ Trust to help diversify risk, or use a combination of both. With stocks now trading at lofty valuations and a new administration likely to introduce more uncertainty into the stock market, 2025 is likely to be a volatile year for investors. But they'll probably have opportunities to capitalize on sell-offs, much as we saw after the Federal Reserve scaled back its forecast for rate cuts. Keeping some dry powder on hand for such movements will almost always pay off, as the AI boom still has the ability to carry the tech sector higher over the next few years. But there should be plenty of pullbacks as the market wrestles with higher prices for the biggest tech stocks.

Here are startling AI stocks forecast for 2025; investors take note

There are a list of AI stocks one should look out for in the current new year 2025, as they are promising to give US investors some optimum returns at Wall Street. Will that be backed by the epic bull run Wall Street has seen in the las two years? Here's what investors should knowAI stocks are currently a sensation across the globe, especially in the US where the AI race is concentrated. Wall Street has been seeing an epic run of AI stocks through 2023 and 2024, with the new year 2025 also promising some good returns. However, if Brazilian Nostradamus Athos Salome is to be believed, AI could be in for some dark days ahead in 2025, as its limitations and threats could come to light, pushing away people from it. Although AI stocks are currently creating frenzy, the overhype may reportedly die down with the saturation of this market coupled with agitated competition between companies backed by AI research. There are chances that if such a scenario arrives in 2025, stocks could go tanking, especially the likes of Nvidia, Google and others who are currently deeply invested into AI. Meanwhile, The Street's report suggests that cloud computing has a major potential of backing up AI's hype, or replace it entirely. There is already a lot of strong arguments on behalf of cloud computing, and its primary definition lies with the fact that it is a field of study where quantum mechanics are used to solve complex problems faster than the traditional computers. If quantum computing comes into the hype mode at Wall Street, it may create a similar frenzy AI did int the last couple of years. However, a bull run at the stock market is also a slight necessity in such circumstances to back the stocks associated with it. Is Nvidia's stock going to grow further? Yes, after Nvidia's decision of introducing AI-reliant GPUs, it's stock has shot through the roof, and is now growing at a phenomenal pace. Has the US stock market crashed in the past few days? No, the US stock market has not crashed in the last few days, and has instead been on a superb bull run for a long time now.

3 Top AI Stocks to Watch in 2025 | The Motley Fool

These stocks are high-quality picks even after the technology boom of 2024. The U.S. stock market has demonstrated a strong performance in 2024, with the benchmark S&P 500 posting a total return of about 25% as the year nears its end. Not surprisingly, the technology sector, especially artificial intelligence (AI) powered stocks, has been at the heart of this bull rally. There has been some increase in market volatility in December 2024 due to the Federal Reserve's indication of fewer-than-expected interest rate cuts in 2025. Despite these headwinds, there are some high-quality, fundamentally strong stocks to watch out for in 2025. Against this backdrop, these stocks can prove to be compelling picks for astute investors in 2025. Here's why. Nvidia (NVDA -2.09%) has emerged as a standout stock in 2024, demonstrating exceptional financial performance and technological prowess. It is indisputable that the company's AI-optimized ecosystem (hardware, software, partners) has been at the heart of this dramatic growth trajectory. Nvidia's revenue soared by a solid 94% year over year to $35.1 billion in the third quarter of its fiscal 2025 (ended Oct. 27), driven mainly by 112% year-over-year growth of the AI-focused data center segment. The top-line growth trajectory may continue for several quarters, thanks to the staggering demand for the company's full-stack, full-infrastructure, and highly customizable AI data center scale Blackwell systems. The company has already shipped 13,000 samples of its next-generation Blackwell systems to customers including ChatGPT developer OpenAI. After dominating the AI training market, Nvidia now stands to benefit dramatically from the growing demand in the inference market (deploying complex AI models in the production environment) due to its large installed base and robust software ecosystem. The company has successfully transitioned its hardware chips and software from training to inferencing workloads -- implying that existing customers will not have to switch to competition. Nvidia's enterprise AI software solutions are also being increasingly adopted by prominent companies such as Salesforce, SAP, and ServiceNow. All these trends have helped to strengthen Nvidia's moat further. Considering Nvidia's diverse growth catalysts in the AI market and the excellent financial growth prospects, the company is well-positioned to deliver solid returns in 2025. Being the second-most prominent AI chip maker globally, Advanced Micro Devices (AMD 0.10%) is all set to benefit significantly in the rapidly expanding AI market (with a target addressable market estimated to be worth $500 billion by 2028). The company's data center revenue soared by 122% year over year to $3.5 billion in the third quarter, driven mainly by solid uptake of its Instinct GPUs and EPYC server CPUs. AMD now expects data center GPU revenue to be over $5 billion in 2024, an upgraded estimate from the previous $4.5 billion guidance provided in July 2024. Hence, although it's behind Nvidia, AMD is steadily expanding its presence in the AI market. Microsoft uses AMD's MI300X chips to power multiple copilot services. Meta Platforms has also chosen these chips to power its inferencing infrastructure at scale, especially for its most demanding open-source Llama model. AMD is also focusing on performance improvements to further boost adoption of its GPUs. The recently launched MI325X GPUs have demonstrated 20% better inferencing performance than H200 chips. AMD is also gearing up for the launch of the upcoming MI350-series GPUs scheduled in the second half of 2025. Looking ahead to 2025, analysts expect AMD's revenue to be around $32.56 billion, implying year-over-year growth of 26.88%. Plus, the company is profitable and free-cash-flow positive. Hence, AMD may be a worthwhile stock to watch out for in 2025. Alphabet (GOOG -1.55%) (GOOGL -1.45%) has emerged as a formidable player in the AI space and is already earning money from its AI offerings. Although the company faces multiple headwinds, including antitrust challenges and adverse Department of Justice rulings (including a recent one wanting divestiture of its Chrome browser and Android mobile operating system), Alphabet's fundamentals are pretty strong. Google is still a leader in the global search market with an 89.9% share. Furthermore, the company has introduced AI Overview features in Search across 100 new countries and territories that will reach over a billion users every month. This translates into increased frequency and complexity of search queries -- which means more user engagement for the company's search business. Google Search revenue was up 12% year over year to $49.4 billion and represented 57% of the company's total revenue in the third quarter. Google Cloud is also becoming a major catalyst, with revenue growing an impressive 35% year over year to $11.4 billion and operating income soaring by nearly 631% year over year to $1.9 billion in the third quarter. Robust adoption of AI infrastructure and generative AI technologies across industries and use cases has played a pivotal role in Google Cloud's growth. Hence, Alphabet looks like an attractive pick based on market leadership in the AI-powered search market and growth prospects in the cloud business.

History Says the Nasdaq Will Soar in 2025. My Top 10 Artificial Intelligence (AI) Growth Stocks to Buy Before It Does. | The Motley Fool

AI went viral last year, helping fuel the market recovery. There's likely more to come. The Nasdaq Composite has been gaining ground for more than two years now. Its rise was driven by the dawn of artificial intelligence (AI), a U.S. Presidential election, declining inflation, and the beginning of long-awaited interest-rate cuts. After jumping 43% in 2023, the tech-focused index has gained 33% in 2024, as of this writing. Yet history suggests the market likely has further to climb. Going back to 1972 -- the first full year in which the Nasdaq traded -- in each year following gains of 30% or more, the tech-centric index has climbed 19%, on average, which suggests the rally could continue well into 2025. Recent advances in AI get at least part of the credit for investors' bullish sentiment. The economic impact of generative AI is expected to be as much as $15.7 trillion by 2030, according to Big Four accounting firm Price Waterhouse Coopers. This could result in a veritable profit windfall for the leading players in the field. Here are my top 10 AI stocks to buy for 2025 before the Nasdaq climbs to new heights. No conversation about AI would be complete without a nod to Nvidia (NVDA -2.33%), which quickly cornered the market for AI processing. Its graphics processing units (GPUs) were already the gold standard for gaming, cloud computing, data centers, and machine learning, but it was the rapid adoption of generative AI that really sent the company's stock soaring. Even after two years, Nvidia is still scrambling to keep up with the demand -- which shows no signs of easing. The launch of the company's next-generation Blackwell processors is imminent, and CEO Jensen Huang said demand is "insane." The company has pivoted to a one-year product-release cadence, showcasing its relentless pace of innovation. After five consecutive quarters of triple-digit year-over-year growth, Nvidia is facing tougher comps, but Wall Street is still predicting 50% growth next year. Despite the vast opportunity, the company's stock remains attractively priced, selling for just 31x next year's expected earnings. With more than 20 years of AI experience under its belt, Palantir Technologies (PLTR -2.01%) was prepared when generative AI went viral. The fruit of its labor is its Artificial Intelligence Platform (AIP), which hit the ground running. The company offers boot camps that pair customers with Palantir engineers to get their AI efforts up and running quickly, and deal conversions following these boot camps have taken off. The company's U.S. commercial segment -- which includes AIP -- grew 54% year over year and 13% sequentially, fueling a 73% increase in its remaining deal value (similar to backlog). At the same time, the segment's customer count jumped 77%. All in all, Palantir closed 104 deals worth at least $1 million. Of those, 36 were worth more than $5 million, and 16 clocked in at $10 million or more. The company noted multiple instances of "seven-figure deals" signed within weeks of boot-camp attendance. Given the magnitude of the opportunity, Palantir remains reasonably priced, with a forward price/earnings-to-growth (PEG) ratio of 0.65, when any number less than 1 suggests an undervalued stock. Microsoft (MSFT -0.78%) gets at least partial credit for sparking the AI revolution. Its investment in ChatGPT creator OpenAI and its subsequent integration shined a spotlight on generative AI -- and the race was on. Its flagship AI offering is its productivity-enhancing suite of AI assistants, dubbed Copilot, which could generate as much as $100 billion in incremental revenue by 2027, according to some on Wall Street. Microsoft's Azure Cloud is already reaping the rewards of its AI strategy, generating 30% growth in its fiscal 2024 (ended June 30), outpacing that of its rivals. The company just released tools to track return on investment (ROI) in AI spending and is working to bring down the cost of adopting AI, removing two key hurdles. Microsoft is also working to develop AI agents that would focus on mission-critical issues. The stock is selling for 33 times forward earnings, which is a slight premium, compared to the price-to-earnings (P/E) ratio of 31 for the S&P 500. That's a reasonable price, given Microsoft's growth potential. Broadcom (AVGO -1.59%) supplies a wide variety of chips and accessories that are critical components in data center infrastructure and the overall internet ecosystem. That put the company in the hot seat when AI caught on, as most AI processing takes place in data centers. In its recently completed quarter, Broadcom delivered results that beat expectations, but the headliner was its long-range guidance. Management is calling for AI revenue to grow by 500% at the midpoint of its guidance by 2027. Additionally, Broadcom just added two new hyperscale customers -- not included in its forecast -- to develop custom AI accelerators, so its guidance could well be conservative. Despite its accelerating growth, Broadcom is attractively priced, with a PEG ratio of 0.09, when any number less than 1 suggests an undervalued stock. While Arm Holdings (ARM -2.02%) may not have the name recognition of some other AI stocks, its contribution is no less crucial. The company licenses the blueprints for the "cores" that make up a broad cross section of CPUs and GPUs that are fundamental to AI processing. The company notes it's responsible for a "significant proportion of all chips with embedded processors." Take Nvidia's GH200 Grace Hopper Superchip, for example. It uses 144 Arm version 9 (V9) CPU cores. The V9 provides greater computing power at twice the royalty rate of its predecessor. Estimates suggest Nvidia will sell roughly 4 million GPUs this year -- and that's just one of Arm's many customers. This helps illustrate the magnitude of the opportunity. Arm is also reasonably priced, with a PEG ratio of 0.87. Taiwan Semiconductor Manufacturing (TSM -1.45%), commonly called TSMC, is the "world's largest and best semiconductor foundry," according to the company, which illustrates why it's a key player in the adoption of AI. In fact, Nvidia, Arm, and Broadcom are all customers. Management expects revenue from AI processors to triple this year, accounting for roughly 15% of revenue. To meet the surging demand, TSMC is building three semiconductor fabrication facilities, which will bring greater economies of scale. The first facility will begin volume production beginning early next year. The company goes on to note that "almost every AI innovator" is working with them, which represents a sizable opportunity. At just 28x next year's earnings, TSMC stock is attractively priced. Alphabet (GOOGL -1.01%) (GOOG -1.17%) was among the early adopters of AI, deploying these sophisticated algorithms to improve the relevance of both its search results and the resulting digital advertising. The company was also fast off the mark to leverage generative AI and offer these breakthroughs to its Google Cloud customers. Just this month, Alphabet introduced Gemini 2.0, a large language model (LLM) enabling the next generation of AI agents: The biggest opportunity is the increasing demand for the company's Google Cloud, one of the fastest-growing cloud infrastructure providers. Its Vertex AI provides access to 160 foundational models that help users get up and running with AI quickly. At 25x earnings, Alphabet is arguably the most reasonably priced of all the major AI players. Until recently, Amazon (AMZN -0.86%) has largely been the Rodney Dangerfield of AI -- not getting any respect. But that perception is beginning to change. The company has a long track record of using AI to make its operations more efficient, but its generative AI strategy is coming into view. CEO Andy Jassy recently revealed, "In the past 18 months, Amazon Web Services (AWS) has released nearly twice as many machine learning and generative AI features as the other leading cloud providers combined [emphasis by author]." The cloud leader also provides customers access to all the most in-demand generative AI models via its Bedrock AI. Furthermore, Amazon offers its Inferentia and Trainium purpose-built AI chips as a more cost-effective alternative to high-end GPUs. Amazon will also benefit from the improving economy, boosting its e-commerce and digital advertising businesses. At roughly 3x forward sales, it's fairly inexpensive. Meta Platforms (META -0.97%) has long used AI to surface relevant content on its multiple social media platforms and inform its targeted advertising. However, its treasure trove of user data provided the foundation for its LLaMA AI, which has joined the ranks of the top foundational AI models. While hyperscalers and cloud operators pay to use LLaMA, it's free to most individual users. The most recent version, LLaMA 3.1, is "in a class of its own," according to Meta. The system will help developers create a variety of AI agents -- or autonomous AI models designed to complete specific tasks without human intervention. Meta's digital advertising will also benefit from the improving economy. At just 28x earnings, the stock is a steal. Tesla (TSLA -3.25%) stock has been on a tear in recent months, and the biggest catalyst is the incoming Trump administration, as the policies of the President-elect are expected to favor Tesla. The end of rebates and tax incentives for electric-vehicle (EV) customers would benefit Tesla as the industry leader. Wedbush analyst Dan Ives remains bullish and expects Tesla's market cap to hit $2 trillion in 2025, saying the coming four years will be a "total game changer" for Tesla. He expects the Trump administration to fast-track full self-driving (FSD), paving the way for the company's robotaxi agenda. After the recent run-up, Tesla is expensive relative to its AI peers, with the stock selling for 173x forward earnings and 12x next year's sales. That said, Cathie Wood's Ark Invest estimates the robotaxi market could be worth as much as $28 trillion over the next decade. As one of the expected robotaxi industry leaders -- if it comes to pass (and that's a big if) -- Tesla could well be a bargain at this price.

Technology stocks are capping off another strong year. What's next for the sector in 2025

The year just ending delivered another blowout return for technology stocks as investors and megacap companies themselves poured billions into artificial intelligence, driving market favorites to new heights. The Magnificent Seven stocks led by Nvidia dominated the investment landscape, as they did in 2023, sending broad market indexes to record after record. Nvidia, the dominant maker of AI semiconductors, won a coveted spot in the Dow Jones Industrial Average late this year, and all but Microsoft outperformed the benchmark S & P 500 index, which soared 27% in 2024 while the Nasdaq Composite jumped 34%. Looking ahead, many Wall Street analysts and portfolio managers expect technology's strong performance to continue in 2025, but also anticipate a broadening out across the sector and the AI narrative. "This year was clearly the year of AI, with Nvidia paving the way from a trend and theme standpoint," said AXS Investments CEO Greg Bassuk. "2025 is what we're referring to more as the AI adjacent sectors. Next year is really going to be the year of this move from hardware to software." More than two years after the Nov. 2022 debut of ChatGPT, the AI chatbot that answers questions by using natural language to generate human-like text , investor attention remains fixed on how AI is being used today as well as future applications. That enthusiasm is expected to extend into a third year in 2025. .IXIC YTD mountain Tech-heavy Nasdaq year to date But the path is unclear. Heading into the new year, tech stocks face a new White House administration in a little more than three weeks, and a Federal Reserve that's embarked on a more sluggish policy of lower interest rates after the most aggressive tightening period in a generation. And while stocks rallied in the wake of President-elect Donald Trump's victory last month, campaign promises to enact tariffs to protect American business could disrupt closely-connected international supply chains. Tariff threat The potential for increased tariffs in the new year creates uncertainty for the technology sector, especially semiconductors dependent on parts from Taiwan and other countries. "The good news is within the last decade you've seen companies taking pretty significant actions to ensure that there is diversification in their supply chains," said Scott Kessler, head of tech, media and telecom at global researcher Third Bridge. Higher tariffs "could be perceived as a risk, but people aren't sure what's going to be proposed, what's going to be implemented, and how long we're going to see those things in effect." Even under the outgoing administration, companies have faced limits on their business. Last year, for example, the Biden administration imposed new curbs , barring some advanced Nvidia semiconductors from sale in China out of fear they could be used by the military. Taiwan, too, may also be slapped with tariffs under a Trump administration, with the president-elect saying on a podcast in October that the island nation has stolen U.S. chip business . To be sure, tariffs might cut both ways and prove a potential boon for U.S. companies by reducing overseas competition, said David Miller, chief investment officer at Catalyst Funds. The tariff threat may also simply serve as a negotiating tactic to improve trade relationships, he said. "We've already had a falling out with China, but if it gets to the point that it was with Russia, we're going to be in a really bad spot," Miller said. AI and Nvidia evolution Many on Wall Street view 2025 as the year the AI story broadens out beyond a handful of infrastructure builders and megacap leaders. For more than two years, companies have touted potential use cases for AI, but few have actually brought any projects to market. Notable exceptions include Apple recently launching its Apple Intelligence AI initiative and Microsoft introducing its Copilot assistant. Many smaller companies, however, have failed to meet similar goals. "There's a reason they call these companies 'The Magnificent Seven,'" Miller said. "They're in monopolistic positions in their industries, and I don't think there's anything fundamentally standing in their way." One of the biggest questions in 2025 is what happens to AI leader Nvidia after another year of scorching market appreciation and record-setting earnings. NVDA YTD mountain Nvidia shares this year Shares of the AI chip darling have soared more than 180% this year after climbing 239% in 2023. The stock also split 10-for-1 in June and joined the Dow in November. "It has been absolutely insane," said Angelo Zino, an analyst at CFRA Research. "If you look at just the data center business over the last eight quarters, it's essentially up north of seven-fold. You're not going to see anywhere near those types of growth rates" in the future. He views Nvidia's graphics processing unit technology conference early next year and the Blackwell chip rollout as potential catalysts for the stock, but notes that 2025's gain may not match the past two years. Baird's technology desk sector strategist Ted Mortonson said that Nvidia's product upgrade cycle is likely to fuel some volatility in the shares as Jensen Huang's company works through transition kinks. Given this, he expects the second half to bode better for the stock than the early part of the year. Software -- the next AI frontier Investors also view software as an area that's rife with opportunity in 2025 as the AI buildout reaches the use case stage. The sector diverged in 2024, with companies such as Palantir surging to new highs as others languished. GoDaddy and Oracle -- on pace for its best year since 1999 -- joined Palantir in handily outperforming the S & P 500, while former highflier Adobe slumped 25%. ORCL ALL mountain Oracle heads for best year since 1999 Kayne Anderson Rudnick's Julie Biel pointed to vertical software companies as one of the areas of opportunities in 2025, given their domain expertise with specific data sets. "Should we see more generative AI start to infiltrate the corporate world, those are the types of companies that are better positioned from a profitability standpoint, and are going to be better protected if we see a lot of disruption," said the chief market strategist. Among the vertical software names are government software provider Tyler Technologies and infrastructure firm Bentley Systems , Biel said. Bassuk at AXS Investments focused on Workday given its human resources and financial software partnerships with top-tier companies, culminating in its elevation to the S & P 500 last week. Some companies have already begun gaining leverage by monetizing AI, according to Mortonson at Baird. They include ServiceNow , HubSpot and Palantir -- the latter having more than quadrupled in value this year, soaring 378% and leading the S & P 500. APP YTD mountain AppLovin shares in 2024 Mortonson also highlighted MongoDB , AppLovin and Snowflake as potential beneficiaries of AI investment in 2025. AppLovin has already shot up 770% this year, bringing its market value to $123 billion. The company should benefit as it shifts from gaming to broader digital advertising, the sector strategist said. CFRA's Zino views Microsoft in a good position after its relative underperformance since the pullback in technology stocks this summer. He also favors Salesforce and Adobe, the latter as a potential turnaround after this year's struggle. "The valuation of that name has gotten depressed relative to the rest of the software space," Zino said of Adobe. "If they can show some signs of AI monetization, that's a name that could work."

Artificial Intelligence Made These Stocks the Market Darlings of 2024

Colin is an Associate Editor focused on tech and financial news. He has more than three years of experience editing, proofreading, and fact-checking content on current financial events and politics. He received his M.A. in journalism from The New School and his B.A. in history and political science from McGill University. If anyone needed proof that artificial intelligence was more than a passing fad on Wall Street, they got it in 2024. For a second consecutive year, AI was the phrase on everybody's lips. The number of companies mentioning "AI" on earnings calls continued to rise after skyrocketing last year. And investors continued to drive up the shares of companies that are already benefiting from AI or are expected to soon: Of the five best-performing stocks in the Russell 1000, three could attribute their meteoric rise this year to artificial intelligence. Software company Applovin (APP) said advertising revenue grew 66% in the most recent quarter, driven by improvements to its artificial intelligence model "through ongoing self-learning and directed model enhancements." In the same quarter, Applovin more than tripled its profit. Shares jumped nearly 50% the day after those results were reported, contributing to the stock's more than 740% rise this year through Friday's close. Palantir Technologies (PLTR) stock a;so took off this year as it flexed its AI muscle. On Palantir's most recent earnings call, executives highlighted how customers were using its AI platform to save time and improve results. The company's sales rose 30% in the quarter, with double-digit growth in both its commercial and government businesses. Palantir shares have gained some 360% in 2024. Vistra (VST) was the second-best performing stock in the S&P 500 in 2024 as investors learned that its generally sleepy, slow-growing sector -- utlities -- could have its businesses turbocharged by AI. Vistra shares have soared about 260% this year as the electricity demands of AI became clearer and analysts identified the power generator as a possible beneficiary. The rush into utilities stocks was particularly dramatic for the owners of nuclear plants, which companies like Microsoft consider vital to powering data centers. Constellation Energy Group (CEG) and Microsoft in September inked a deal to bring part of Pennsylvania's Three Mile Island back online. Constellation shares rose more than 90% this year. Data center electrification also contributed to GE Vernova's (GEV) strong performance this year. The company in December raised its long-term sales outlook, citing demand for gas turbines and electrical grid equipment. The stock has gained more than 130% since the separation of General Electric into three companies was completed earlier this year. Shares of Nvidia (NVDA), the poster child of the AI rally. have risen roughly 180% this year after nearly tripling in value in 2023. CEO Jensen Huang has called demand for Nvidia's chips "insane," an assessment borne out by the company's soaring quarterly sales and profits. Nvidia isn't the only big chipmaker whose stock got a major boost from the AI buildout. Shares of Broadcom (AVGO) rose more than110% this year as demand for its custom chips and networking equipment surged. Broadcom became just the ninth U.S. company to reach a $1 trillion market capitalization in December after it beat quarterly earnings estimates and said it was working with three major tech companies on custom AI infrastructure.

3 Artificial Intelligence (AI) Stocks With 60% to 194% Upside in 2025, According to Select Wall Street Analysts | The Motley Fool

Not every AI stock has a sky-high valuation. These three all offer great upside at good value. The biggest winners of the current bull market have been companies closely tied to the advancements in artificial intelligence. After zooming significantly higher over the last two years, many stocks appear fully priced. In fact, some AI darlings currently trade at prices higher than almost every analyst on Wall Street expects them to trade a year from now. But there are still plenty of opportunities in artificial intelligence. Big tech companies expect to ramp up their spending on AI hardware and development in 2025 and beyond, and Wall Street analysts see several companies that could continue to climb from here. Here are three AI stocks with up to 194% upside in 2025, according to select Wall Street analysts. Micron (MU -1.35%) is a semiconductor manufacturer specializing in memory chips. Its high-bandwidth memory (HBM) chips are key components for artificial intelligence servers. Rosenblatt analysts put a $250 price target on Micron shares, implying 194% upside on the stock from its price as of this writing. It's worth noting that this price target came out before Micron's recent first-quarter earnings. The company reported solid results, but its outlook disappointed investors, sending the shares lower. Rosenblatt's analysts and other Micron bulls might suggest it's an even better deal now despite the weak outlook. The challenge for Micron is the cyclicality it's facing for its consumer-focused chips. Management lowered its forecast for the next quarter due to customer inventory reductions from PC and smartphone suppliers. That slowdown has a significant impact on Micron because it manufactures its own chips, unlike many other chipmakers these days. That means it invests a lot of capital upfront in order to make better margins in the long run. But those profits can disappear if there's not enough revenue to cover its cost of capital. The good news is the demand for its HBM chips propelled its data center business to become the majority of its revenue. Data center revenue grew 400% in the first quarter from a year ago. That trend will get stronger in 2025, leading to significant upside for the stock. With shares trading at an enterprise value-to-revenue multiple of just 3.6, there's room for that multiple to expand. Revenue growth should remain strong in 2025, and it should show considerable profit improvements despite the headwinds of its consumer business. Analysts currently expect profits to grow from $1.30 per share to $8.90 in fiscal 2025 (ending in August). That gives it a forward P/E of less than 10 at its price as of this writing. Even if it doesn't climb all the way to $250 over the next year, the stock looks like a bargain here. Another semiconductor stock Rosenblatt's analysts are bullish on is Advanced Micro Devices (AMD -1.35%). The semiconductor company makes GPUs and other AI accelerator chips that big tech companies use to train and run large language models for generative AI applications. Rosenblatt put a $250 price target on AMD shares as well, implying 106% upside from the price as of this writing. Nvidia has been the dominant supplier of GPUs as tech companies build out their servers and data centers in a race to develop leading-edge generative AI capabilities. However, AMD presents a very strong second choice in the market and a viable alternative to Nvidia. That should ensure it maintains a presence in the growing market, as Nvidia's AI customers will want to avoid putting all their eggs in one basket and becoming reliant on Nvidia's chip supply. AMD produced very strong results over the past year as it rides the growing demand for GPUs. Its data center revenue, which is primarily driven by AI accelerators, grew 122% in the third quarter from a year ago. Its gross margin expanded to 50%, up 3 percentage points. Combined, that led to considerable profit growth, up 31% on a per-share basis. However, that growth may be just getting started. Revenue growth is set to accelerate in 2025 as AMD continues to advance its AI chip technology and more customers expand their use of AMD's products in their data centers. AMD accelerated the timeline of its GPU development, with plans to launch its MI355X less than a year after the MI325X, which launched in October of this year. The MI400 Series will be available in 2026. Each will offer massive performance improvements as it looks to catch up to Nvidia and take some of its market share. Meanwhile, AMD's CPU business is performing well, as it's successfully winning server market share. Its fabless model allows it to bring new products to market more quickly and take advantage of the best manufacturing technology available without major capital expenses. That's helped provide a base level of growth for the chipmaker as it works to develop new AI chips. AMD shares currently trade around 24 times forward earnings expectations. That's a relatively low price, considering the consensus estimate calls for 54% earnings growth next year. Rosenblatt analysts think 25 times earnings is a fair multiple for AMD but see earnings climbing to $10 per share in 2026, giving it a $250 price target. Even if earnings climb to the Wall Street consensus of $6.56 per share in 2026, a 25 times multiple would put shares at $164 by the end of 2025, an upside of 35% from the share price as of this writing. Dell (DELL 0.37%) is best known among consumers for its personal computers, but its growing server business has been the driving force behind its recent growth. Dell assembles and sells AI-optimized servers for data centers, and that business is growing fast. Its Infrastructure Solutions segment grew sales 34% year over year, with servers and networking up 58% in the most recent quarter. Loop Capital has a $185 price target on the stock, which implies about 60% upside from the stock price as of this writing. This price target came ahead of Dell's third-quarter earnings results in November, which disappointed many investors. That sent shares lower, but it may turn out to be a buying opportunity. While Dell's Infrastructure Solutions business is growing quickly, it's being dragged down by its PC business. Its Client Solutions segment saw revenue decline 1% year over year last quarter. What's more, Dell missed analysts' total revenue expectations for the quarter, and its forecast fell short of what analysts were modeling as well. However, management expects the PC market and traditional (non-AI) servers to undergo a refresh sometime next year, leading to strong growth in its lagging business segment. Meanwhile, AI demand will not dissipate any time soon. Management noted that it received $3.6 billion worth of orders for its AI servers last quarter, which compares favorably with the $2.9 billion in sales during the third quarter. Its total pipeline for AI server sales over the next five quarters grew 50% sequentially, so investors should see strong growth at least through fiscal 2026 (ending Jan. 2026). Dell stock trades for just 12.2 times analysts' earnings expectations for fiscal 2026. Considering the average analyst expects Dell to grow its earnings per share by about 20% next year, that presents a great price for the stock.

The AI stocks that could boom in 2025

Nvidia (NVDA), Amazon (AMZN), Alphabet (GOOGL), and Apple (AAPL) could continue to be some of the biggest winners of the artificial intelligence-driven stock boom, David Dietze, senior portfolio strategist at Peapack Private Wealth Management, said in the latest episode of Quartz AI Factor, a video series set at the Nasdaq MarketSite. Shares of AI chipmaker Nvidia -- "the granddaddy of them all," as Dietze puts it -- soared more than 170% this year, giving it a roughly $3.3 trillion market capitalization as it rides tremendous revenue growth and overwhelming demand for its AI chips. Shares of e-commerce giant Amazon, which is also getting in on the chip game, surged more than 50%. Google parent Alphabet stock rose 40%, and Apple climbed more than 35%. The Magnificent 7 -- Apple, Microsoft (MSFT), Nvidia, Alphabet, Amazon, Meta (META), and Tesla (TSLA) -- have accounted for about a third of the S&P 500 index's gains this year, largely powered by excitement around new AI technologies. But Goldman Sachs (GS) has warned that this "unusual degree of market concentration" could pose a major risk next year. Stocks that have benefited from the AI boom have largely done so independent of interest rates. But that doesn't mean they aren't in for a correction as the market settles from the post-presidential election rally. Dietze said that could happen in the not-so-distant future. "They're riding a secular tailwind of extreme innovation that could plow right through that," Dietze said. "Nevertheless, no sector operates in a silo or a vacuum. If everything else around them is struggling, they're gonna struggle a little bit, too." Dietze said one major theme for 2025 will be: show me the money. While major companies such as Amazon, Microsoft, and Alphabet have poured billions into AI partnerships and their own initiatives, investors are likely going to start looking for proof of returns next year, Dietze said. "Wall Street's the type of place where it's like, 'Show me the money, like, yesterday," he said. "These investments and capital expenditures are great, but when does the cash flow start coming in? And right now many AI companies have gotten a pass on that, but I think increasingly Wall Street's going to say, 'No, we've seen the capital expenditures, you've got the AI label, but now we want to see the cash flows coming in from that.'" "And that's what we're gonna be watching so carefully next year," Dietze said. Watch the latest episode of Quartz AI Factor above.

3 Tech Stocks You Can Buy and Hold for the Next Decade | The Motley Fool

Artificial intelligence could create trillions of dollars in annual economic value. The market leaders in key AI sub-markets could drive long-term market-beating returns. The artificial intelligence (AI) boom of early 2023 has supported a remarkable two-year run (so far) for stocks in the technology sector. There are always market downturns along the way, but AI represents a genuine game-changer that society hasn't seen since arguably the introduction of the internet. Research from consulting firm McKinsey estimates the annual economic impact of AI could exceed $23 trillion by 2040. Today's global GDP is approximately $100 trillion, so the implication is that AI could drive tremendous growth for the world's economy over time. It's not too early to think a decade (or further) out, putting your money on the technology companies most likely to lead the future. To help in your research, consider taking a closer look at these three top technology stocks and perhaps buying and holding them for a decade or longer. It's probably not a shock that Nvidia (NVDA 0.39%) leads this list. It's the de facto leader in AI chips, arguably the most crucial resource for AI. AI requires immense computing power to train and operate large language models like OpenAI's ChatGPT. Smarter AI requires more computing power, positioning Nvidia for growth cycles for the foreseeable future. The company's Hopper architecture built today's models, and Nvidia has begun rolling out its next-generation semiconductor product in Blackwell, which seems poised for tremendous success. The stock's 820% run since early 2023 may feel impossible to build on, but Nvidia's dominance in such a vast AI market could be unprecedented. Given Blackwell's looming success, analysts estimate Nvidia will grow earnings by an average of 38% annually over the long term. The stock trades at a forward P/E ratio of 45 today, an attractive valuation for a company with such high anticipated earnings growth. Nvidia's continued excellence and seemingly locked-in market leadership justify buying the stock for expected outsized future returns. The "cloud" sounds up in the sky, but it's the ground layer for modern technology, including AI, which companies will deploy through cloud computing platforms. Therefore, Amazon (AMZN 1.77%) will be a no-brainer for the next decade as the world's leading cloud platform. Investors get far more than a cloud computing business in Amazon, including dominance in U.S. e-commerce, a blossoming advertising business, and a strong Prime membership subscriber base of over 200 million. Research by Goldman Sachs estimates that global cloud revenue could top $2 trillion by the decade's end (partly due to AI). Amazon, with about 31% of the market, has generated $103 billion from its cloud segment over the past year. In other words, Amazon's cloud platform could multiply in size over the coming decade. If so, that will significantly benefit shareholders since it's the most profitable part of the company. Analysts estimate Amazon's earnings will compound at 22% annually over the long term. Meanwhile, the stock trades at a forward P/E of 44. That's not a bargain, but plenty reasonable given the growth ahead. Amazon stock should thrive over the coming years, so don't hesitate to continue accumulating shares today. Nvidia and Amazon represent AI infrastructure, the high-level technology and hardware needed to make AI possible. Now, it's time to focus on applying AI to the real world, where Palantir Technologies (PLTR 2.09%) is starting to establish itself as the market leader. The company's software platforms can build and deploy AI and data analytics for various applications, ranging from military and defense to supply chain management. The company built its reputation with government work over a decade ago but has become arguably the hottest software vendor in the commercial sector since launching its AIP platform for AI applications in April 2023. Palantir's U.S. commercial customer base has grown from 181 to 321 over the past year, and there are still about 20,000 large companies in the U.S. alone. It's not an exaggeration that Palantir has a nearly endless growth runway because its product is so diverse -- it's usable virtually anywhere there's data. Revenue growth is accelerating, and analysts estimate the company will grow its earnings at a blistering 27% annualized rate over the long term. Palantir's valuation is the only drawback right now. The stock trades at a whopping 212 times earnings, which is ridiculously expensive, even when you're investing for a decade out. Consider nibbling on shares at first, waiting for an eventual pullback to acquire more reasonably priced shares.

Wedbush lists top 10 tech winners for the 'AI revolution into 2025' By Investing.com

Investing.com -- Wedbush analysts expect a 25% rise in tech stocks in 2025, driven by reduced regulatory pressures under a potential Trump presidency. The departure of Federal Trade Commission (FTC) Chair Lina Khan and a more AI-friendly environment in Washington are seen as tailwinds for Big Tech heading into next year. "We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI cap-ex over the next 3 years," analysts led by Daniel Ives said in a note. They highlight that while concerns around Federal Reserve policies, tensions with China, and stretched valuations may lead to volatility, these dips are expected to offer buying opportunities. Wedbush emphasizes that sticking to core tech names remains a key part of its investment approach, highlighting its "top 10 tech winners for the AI revolution in 2025." These include Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Palantir (NASDAQ:PLTR), Tesla (NASDAQ:TSLA), Google (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), MongoDB (NASDAQ:MDB), Pegasystems (NASDAQ:PEGA), Snowflake (NYSE:SNOW), and Salesforce (NYSE:CRM). Software (ETR:SOWGn) is now viewed as a critical part of the AI landscape, with analysts pointing to expanding use cases and growing enterprise adoption expected to accelerate in the coming year. "The AI Software era is now here in our view. We believe the two best software plays on the AI Revolution into 2025 remain Palantir and Salesforce...with many well-positioned software vendors joining the AI Party," Wedbush states. Meanwhile, Nvidia's dominance in AI hardware continues to stand out, with its role described as pivotal in the sector's growth. "The start of this $2 trillion+ of AI spending all began with the Godfather of AI Jensen and Nvidia as they remain the only game in town with their chips the new gold and oil," analysts continued. Cloud giants like Microsoft, Google, and Amazon (NASDAQ:AMZN) are expected to build on this momentum, playing an essential part in shaping the AI Revolution as it enters its next phase.

These were the three best stocks of 2024

While it has been a strong year for the S & P 500 , some names are more to thank than others. The broad index is tracking to end 2024 higher by 23.8%. That far outpaces the average gain of 11% seen between 2014 and 2023. Some stocks ran circles around that performance, thanks to their connection to broader trends like artificial intelligence that captured investor interest this year. Here's the top three performers in the S & P 500 year to date: Palantir Palantir is, far and away, the best-performing S & P 500 member of 2024 . Shares have skyrocketed more than 349%, putting it on track to notch its best year going back through when it went public in 2020. Palantir has caught attention for its connection to AI and software that can be utilized in wartime scenarios. Bank of America Mariana Perez Mora said the company has software that can win wars, and that the company's utilization by governments and businesses is only in the early innings. "PLTR has demonstrated their ability to digitize enterprises and battlespaces from finances to missile production," Mora wrote to clients in a November note. "In a world where efficiency, innovation, safety, and speed are the most valuable assets, we see Palantir as the enabler and winner in this new era." PLTR YTD mountain Palantir, year to date The software stock was added to both the S & P 500 and concentrated Nasdaq-100 this year. It's also gained notoriety among retail investors this year, data on net flows from this group compiled by Vanda Research shows. To be sure, Wall Street isn't certain these gains can be held into 2025. The average analyst has a hold rating and a price target suggesting shares can drop more than 43%, per LSEG. "We are positive on the company's position, but are wary of chasing given strong YTD performance and valuation," said Baird analyst William Power in a note to clients earlier this month. Vistra Vistra is poised to take the runner-up spot with a surge of more than 263%. Like Palantir, 2024 is on track to be the best year on record for the stock. Vistra is one of the energy stocks that have been sought after by investors over the potential demand boom tied to AI. That's because these traders see independent power producers' nuclear and gas capabilities as key to technology companies looking to build out data centers for AI. VST YTD mountain Vistra, year to date Shahriar Pourreza, head of power and utilities at Guggenheim Securities, told CNBC this month that Vistra was a top pick in the space because it has both nuclear and gas offerings. "I like Vistra because I don't have to bet whether the next deal is going to be a nuclear plant or it's going to be a gas plant," Pourreza said. Every analyst who rates the stock gives it a buy, according to LSEG. The typical price target suggests shares can rise more than 16%. Nvidia Nvidia , the chip stock whose position as an AI leader has dazzled traders, came in at No. 3. Shares have soared more than 177%, which would mark its fourth year of the last five where the stock's price has at least doubled. The company gained admission last month to the highly regarded Dow Jones Industrial Average . It's now tracking to claim the best-performer stock within the 30-stock average. NVDA YTD mountain Nvidia, year to date Nvidia has been widely regarded as a titan within the AI space, garnering additional attention from Wall Street and Main Street as the technology became more mainstream. The stock is on track to be the most-bought security on net by everyday investors this year, according to Vanda data as of mid December. While the megacap tech stock has experienced some recent choppiness, Wall Street is still optimistic. The majority of analysts maintain buy ratings, with an average price target reflecting the potential for almost 24% in further upside. One of those bullish analysts is Bank of America's Vivek Arya, who named the stock a top pick within semiconductor names this month. He noted that it should particularly benefit from a continued focus on AI in the first half of the year. "In the first half, we expect the AI investments driven by AI training and scaling of models to continue, doubling down on the NVDA Blackwell deployment ramps driven by cloud customers," Arya wrote to clients. -- CNBC's Spencer Kimball contributed to this report.

Prediction: 2 AI Stocks Will Be Worth More Than Apple Stock by Year-End in 2025 | The Motley Fool

Apple is currently the most valuable publicly traded company in the world, with a market value of $3.9 trillion. The company has held that title for the better part of a decade but has yet to demonstrate it can monetize artificial intelligence (AI). Consequently, I think the two AI stocks below can top Apple's current market value before the end of 2025: Admittedly, my first prediction is somewhat conservative, and my second prediction is very aggressive. Here's what investors should know about these AI stocks. Nvidia has been the foundation of the artificial intelligence (AI) boom. Its graphics processing units (GPUs) are the industry standard in accelerating complex data center workloads, and the company dominates the market for InfiniBand networking, which is currently the preferred connectivity technology for backend networks in AI data centers. The company reported excellent financial results in the third quarter of fiscal 2025, which ended in October 2024. Revenue increased 94% to $35 billion on particularly strong momentum in the data center segment, supported by strong sales growth in the automotive and robotics segment. Meanwhile, non-GAAP net income doubled to reach $0.81 per diluted share. Nvidia has a key catalyst on the horizon in the launch of its Blackwell GPU. Compared to the previous Hopper chip, Blackwell can complete AI training tasks up to four times faster and AI inference tasks up to 30 times faster. The production ramp up began in the current quarter, so Nvidia should see substantial Blackwell sales in the next year. Morgan Stanley expects spending on cloud AI semiconductors to increase more than 50% next year. That paves the way for robust earnings growth from Nvidia. Indeed, Wall Street expects its adjusted earnings to grow 50% in the next four quarters. That consensus makes the current valuation of 53 times adjusted earnings look cheap. Nvidia's stock must reach $164 per share for the company to have a market value of $4 trillion. It will hit that mark if it meets Wall Street's earnings estimates and shares trade above 42 times earnings, which would be a large discount to the current valuation. Personally, I will be surprised if Nvidia doesn't blow past $4 trillion in 2025. Alphabet has two important growth engines in digital advertising and cloud computing. It's the largest ad tech company worldwide, due to the popularity of Google Search and YouTube. And Google runs the third largest public cloud behind Amazon and Microsoft. In both segments, the company is leaning on AI to create new monetization opportunities. Those efforts led to encouraging financial results in the third quarter. Revenue increased 15% to $88 billion, a sequential acceleration from 14% growth in the previous quarter. Operating margin expanded 4 percentage points as the company continued to reengineer its cost base, and GAAP net income increased 37% to $2.12 per diluted share. Wall Street expects earnings to increase 15% in the next four quarters. That estimate, divided into the current valuation of 25 times earnings, gives a price-to-earnings-to-growth (PEG) ratio of 1.8. That's a significant discount to Microsoft's PEG ratio of 4, but I think the market will afford Alphabet a higher multiple once it has more visibility into regulatory issues. To elaborate, a federal judge in August ruled that Alphabet acted illegally to keep its monopoly in internet search, and the Justice Department wants Alphabet to sell its Chrome browser. That would almost certainly hurt its search market share, which likely explains the valuation discrepancy between Alphabet and Microsoft. In other words, Alphabet may have a higher multiple if not for regulatory issues. However, Federal Judge Amit Mehta will make a decision regarding the remedy in August 2025, so the regulatory headwinds may be resolved before year-end. Many analysts think the fix will be less severe than what the Justice Department has proposed because (1) historical precedent makes a breakup unlikely, and (2) the Justice Department may seek a less extreme solution under President-elect Donald Trump. In that scenario, I think the market could afford Alphabet a PEG ratio of 2.6. That implies a share price of $326, based on projected earnings of $8.96 per share in 2025, which implies a market value of $4 trillion. Many things would need to go right for Alphabet to hit that mark next year, but patient investors should feel comfortable buying a position today either way.

3 No-Brainer Artificial Intelligence (AI) Stocks to Buy for 2025 With $200 Right Now | The Motley Fool

Artificial intelligence pushed many stock prices higher, but these three remain great values. The last two years have been dominated by artificial intelligence (AI) stocks. The influx of spending on AI infrastructure and development, combined with investors' excitement around the potential for it to change multiple industries, pushed the prices of several companies' stocks into astronomical territories. It may be hard to find a great company with a stock trading at a fair price for less than $200. But there could be a lot of growth left when it comes to investing in AI. The market for AI hardware and software is expected to grow between 40% and 55% per year through 2027, according to analysts at Bain. While many stocks already have those high expectations baked into the price, these three software and hardware makers all offer the chance to buy into their companies at good value. And the best part is that each stock trades for about $200, making them accessible to just about anyone interested in getting started with AI stocks. Alphabet (GOOG -1.55%) (GOOGL -1.45%) is the company behind Google. While many expected advances in AI from competitors to cut into Google's business, Alphabet's management successfully incorporated AI into its core products. The biggest change to search over the past year is the new AI overview. If you've typed a question into the Google search box in the last several months, you've probably seen AI-generated answers with links to its sources. Management says the new feature is increasing engagement and satisfaction among users, as they find Google can answer more of their questions. Meanwhile, its advancements in AI over the last 18 months enabled it to reduce the cost of using generative AI to answer those queries by 90%, enabling it to roll out the feature around the world. The company also uses its AI capabilities to offer new ways to search the web. One product, Circle to Search, allows users to circle words or images on a webpage while browsing on their Android smartphone and start a search. Google Lens makes searching the web as simple as taking a picture. Both increased valuable search types like product discovery and shopping. Meanwhile, Google Cloud, Alphabet's cloud computing division, saw its revenue grow substantially as developers tap its compute for generative AI applications. Not only has revenue grown over the last two years, but it's also now producing meaningful operating profits for Alphabet. Google Cloud generated $1.9 billion in operating income last quarter, up from $270 million a year ago and a loss of $700 million in the third quarter of 2022. Alphabet continues to innovate in AI. It launched the newest version of its large language model (Gemini 2.0) in December, along with AI agents built on the model to help with browser navigation and debugging computer code. Alphabet's scale and distribution capabilities give it an advantage in developing and popularizing its AI-driven software. With shares trading at $194 as of this writing, the stock looks like a great value. Despite analysts' expectations of double-digit earnings growth for years to come, it trades for just 22 times 2025 earnings expectations. That's a bargain compared to other AI stocks. Qualcomm (QCOM -0.81%) is best known for its wireless patents, which cover 3G, 4G, and 5G connectivity. Every smartphone maker pays a license to Qualcomm to use its patents. That extremely high-margin revenue has helped fuel Qualcomm's innovation in chipmaking, and it's unlikely to change any time soon. Qualcomm makes chipsets for smartphones, ranging from simple baseband chips that allow phones to connect to a wireless network to the all-in-one Snapdragon line, which incorporates an application processor with a baseband or modem set. You can find a Snapdragon chip in most high-end Android phones. So far, Qualcomm's chips haven't had much to do with AI. That's starting to change, though. In 2024, Qualcomm introduced a line of Snapdragon processors designed for Windows PCs with the aim of running on-device AI inferences. Keeping AI processes on-device ensures user data remains private and allows users to take advantage of AI capabilities without an internet connection. While the adoption of so-called "AI PCs" powered by Qualcomm's chips has been slow, it seems more customers will likely demand on-device AI from their smartphones in the future. That requires higher-end processors, like Qualcomm's Snapdragon. As a result, Qualcomm could end up taking more market share in smartphones over the next few years. Meanwhile, Qualcomm also has a burgeoning automotive chip segment. As automotive computers become increasingly complex and reliant on fast on-device AI processing, Qualcomm could prove a valuable supplier for automakers over the next few years. At its investor day in November, management said it had $45 billion in design wins in its automotive pipeline. For reference, the segment generated $2.9 billion in revenue during fiscal 2024. Qualcomm's share price of less than $160 makes it a great way to play the future of on-device AI across smartphones and PCs, not to mention the massive potential in automotive. Analysts expect earnings growth of around 10% for each of the next two years, while shares trade for just 14 times forward earnings estimates. The potential for Qualcomm to expand its share across multiple devices makes it an appealing stock at this price. Taiwan Semiconductor Manufacturing Company (TSM -0.70%), otherwise known as TSMC, is the largest chip manufacturer in the world. It contracts with the biggest chip designers, including Nvidia, Apple, and Broadcom to fabricate the most advanced AI chips on the market. It's a dominant force, commanding over 60% of all spending for semiconductor foundries. TSMC commands such a strong market share due to its advanced technological capabilities. Nvidia CEO Jensen Huang praised TSMC in September, calling it the best in the industry "by an incredible margin." Thanks to its massive market share, TSMC should be able to maintain that technology advantage. That gives it a lot more money than its competitors to invest in developing the next generation of technology, creating a virtuous cycle. TSMC has been a clear winner as demand for AI chips soars. Revenue increased 39% in the third quarter, and earnings soared 54% as its margins expanded due to demand. The demand was mostly fueled by AI-related chips, but strong smartphone orders also helped move the needle. Fourth-quarter revenue is on track for 31% growth, as well as strong margins. Investors should expect profit margins to contract as TSMC rolls out the next generation of its processes in late 2025. Still, they should expand over time as the company scales production, especially if demand for AI chips remains strong. With a growing need for high-end processing capabilities across devices, TSMC should be able to command an even greater share of semiconductor production over the next few years despite already holding a dominant position. As such, revenue should grow faster than the overall industry. At its current price of around $200, shares trade for about 23 times forward earnings. That said, strong margins and growing revenue put analysts' consensus estimate for 2025 earnings growth at 27%. While TSMC might not maintain that growth rate, it won't come down from there very quickly as it remains a key piece of the puzzle in the continued advancement of artificial intelligence. With such strong growth potential, TSMC is a no-brainer for $200.

Cathie Wood's 3 Best Artificial Intelligence (AI) Stocks This Year: Are They Good Picks for 2025? | The Motley Fool

Cathie Wood didn't jump on the artificial intelligence (AI) bandwagon. Her Ark Innovation ETF has been invested in AI for more than a decade. The exchange-traded fund (ETF) lists AI at the top of the list of disruptive innovations that should deliver strong long-term growth. AI has made Wood and several of her Ark Invest funds a lot of money in 2024. Here are her three best AI stocks this year. Palantir Technologies (PLTR -3.72%) currently ranks as the Ark Innovation ETF's fifth-largest holding. However, the AI and data analytics software company ranks as Wood's No. 1 AI stock of the year by far. Palantir's share price has skyrocketed nearly 380% with only a few days left in 2024. Several factors accounted for Palantir's tremendous performance this year. First, the company delivered solid and continually accelerating revenue growth in each reported quarter. CEO Alex Karp wrote to shareholders in November, "The world is in the midst of a U.S.-driven AI revolution that is reshaping industries and economies, and we are at the center of it." Palantir's addition to the S&P 500 in September provided a nice spark, too. More recently, the stock was named as one of three tech stocks being added to the high-flying Nasdaq-100 index. Politics played a part in Palantir's momentum as well. Many investors viewed the incoming Trump administration's focus on driving efficiencies in government, immigration enforcement, and national security as great news for Palantir, which counts the U.S. government as its biggest customer. Wood famously (or infamously) sold much of her stake in Nvidia (NVDA -2.09%) in 2022 and 2023. However, the chipmaker remains a holding for two of her ETFs -- the Ark Autonomous Technology & Robotics ETF and the Ark Next Generation Internet ETF. She's probably glad Ark Invest held on to some shares of Nvidia. The stock has soared more than 180% in 2024 thanks to tremendous demand for its graphics processing units (GPUs). It's no surprise that AI is a massive tailwind for Nvidia. The company's GPUs are the gold standard for training and deploying large language models (LLMs). However, Nvidia believes that its success is due to more than just AI. CEO Jensen Huang argues a major shift from general-purpose computing to accelerated computing is underway. While AI is part of this trend, it would happen even if there wasn't surging demand for AI. No stock is more synonymous with Cathie Wood than Tesla (TSLA -4.95%). She views the electric vehicle maker as a top AI stock. It's certainly her top AI holding, ranking as the largest position for the Ark Innovation ETF, Ark Autonomous Technology & Robotics ETF, and Ark Next Generation Internet ETF. Tesla has also been a big winner for Wood this year. The stock has vaulted more than 80% higher with all of the gains coming since early November. It's no coincidence that the U.S. presidential election occurred around the time Tesla's share price took off. Tesla CEO Elon Musk is a major supporter of President-elect Donald Trump and was named by Trump to co-lead the Department of Government Efficiency advisory team. Many investors appear to believe that Musk's relationship with Trump could bode well for Tesla's prospects over the next few years. Whether or not these three top AI stocks for Wood this year are good picks for 2025 depends on whom you ask. Many Wall Street analysts think Palantir's and Tesla's runs could grind to a screeching halt. However, most analysts are bullish about Nvidia. I think it's possible that all three stocks could rise further in the new year. My biggest concern with Palantir is that its valuation is frothy with shares trading at 172 times forward earnings. Tesla looks pricey as well with a forward earnings multiple of 135, although the company's anticipated launch of a new robotaxi service could provide a nice catalyst. My hunch is that Wall Street has it right about the best of the group. I agree with analysts that Nvidia should have plenty of room to run in 2025 as sales numbers come in for its new Blackwell GPUs.

2 AI Stocks to Sell Before 2025 (Hint: Nvidia's Not One)

However, while early investors made millions from both companies, it might be wise to take profits before 2025. Let's dig deeper to find out why. Palantir's third-quarter earnings grew 30% year over year to $726 million, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 39% to $283.6 million. On the surface, these aren't bad numbers. But they look absurd compared to the company's forward price-to-earnings (P/E) multiple of 172. With shares up 75% so far this year, Arm Holdings is another tech stock that has seen AI hype overshadow its fundamentals. While the company plays an important role in the global hardware ecosystem through its industry-leading chip architecture, it might not benefit as much from AI-related demand as some market participants seem to think. Arm designs central processing units (CPUs), often known as the brains behind a computer. Its architecture tends to be energy efficient, making it popular in devices ranging from laptops to smartphones (where it boasts a 99% market share, according to the company's website). But Arm's popularity is a double-edged sword because it makes it difficult for new opportunities like AI chips to generate enough growth to move the needle. Arm's fiscal second-quarter revenue only increased by 5% year over year to $844 million, driven by smartphone demand (which makes up 35% of its royalty revenue). The smartphone industry is mature (likely peaking in 2016), so investors should expect this business to decline over the long term, potentially draining Arm's growth potential. While it is impossible to time the stock market, the current AI hype cycle probably won't last forever. High-profile AI start-ups like ChatGPT maker OpenAI are still burning through billions of dollars. According to CNBC, many in Silicon Valley are increasingly concerned that the technology's pace of advancement is already slowing down. The year 2025 could be one of reckoning for the AI industry as the market starts prioritizing fundamentals over hype. Investors can position themselves to weather the potential storm by avoiding companies like Palantir and Arm Holdings, which may struggle to justify their sky-high valuations.

These stocks had a big 2024 and analysts think the party is just getting started

Some stocks leading this year's bull rally could be destined for another year of outperformance. Except for a few notable sell-offs, 2024 marked a year of big gains for the stock market. Year to date, the benchmark S & P 500 index has risen nearly 24%, followed by the Dow Jones Industrial Average 's 13% return. The tech-heavy Nasdaq Composite has soared almost 30%. The technology sector's stranglehold on market outperformance eased a tad this year, with the bull rally broadening out to include small-cap stocks. The Russell 2000 is on pace to finish 2024 with a 10% rise . Against this backdrop, CNBC Pro screened this year's big winners for stocks that could be due to repeat their meteoric success next year. To be included in the below table, stocks had to meet the following criteria: Be a member of the S & P 500 On pace for a gain of 30% or more in 2024, as of Dec. 30 Have an average price target implying upside of at least 20% next year The artificial intelligence trade drove upside for stocks such as Nvidia , Dell Technologies and Constellation Energy this year. Nvidia, the poster child for the AI revolution, has surged 178% in 2024, followed by Dell's 50% year-to-date gain. A smattering of banks have highlighted Nvidia as a top stock pick for the new year, including Bank of America and Morgan Stanley . "We have tended to be most enthusiastic on Nvidia when the near-term data points appear mixed, but underlying dynamics are very strong," wrote Morgan Stanley analyst Joseph Moore. "We think we are approaching that point now ... there are a number of concerns here, some of which are overstated, some of which are anxiety inducing short term, but we believe irrelevant longer term." Moore's $166 price target implies approximately 21% upside for shares of Nvidia. Constellation Energy has surged 94% as a pick-and-shovel beneficiary of the AI boom. In September, Constellation announced plans to restart its Three Mile Island nuclear plant and sell the resulting power to Microsoft to support the power needs of data centers. Shares of Eli Lilly have soared 33% in 2024 due to the success of its GLP-1 diabetes management and weight loss drugs. In a note from earlier this month, Bernstein stated its belief that Eli Lilly could benefit from a second Trump term. "With Elon's role in the new administration plus Lilly's ability to bring creative solutions to the table for GLP1s -- we see Lilly in a strong position to work creatively with the new administration to expand access to GLP1s (albeit recognizing there is always a trade-off between access & price)," the firm wrote. "It is possible that Lilly is in a stronger position than Novo to navigate this tight-rope, being U.S. headquartered and having demonstrated a faster path to scaling volume to-date." Bernstein's $1,100 price target for the stock is approximately 42% above where shares closed on Monday. Other names that could notch big gains again in 2025 include GE Aerospace and Delta Air Lines .

2 AI Stocks That Could Help Make You a Fortune

Artificial intelligence (AI) has propelled stocks to monster gains over the last two years, starting with the launch of OpenAI's ChatGPT. By now, investors are well aware of breakout stories like Nvidia and Palantir Technologies that have been early to capitalize on the boom, but there are likely to be plenty of other winners from the new technology. Some CEOs think AI could be as big as the internet, and big tech companies are already spending billions on this evolving technology in order to take leadership of what is expected to be the next major computing platform. However, there are still other opportunities to capitalize on the growth in AI. Let's take a look at two of them. In other words, it's a linchpin in the supply chain for both the semiconductor industry and artificial intelligence as so many companies depend on it to manufacture their products. TSMC has already begun to capitalize on the AI-driven demand as revenue in its most recently reported quarter jumped 39% year over year to $23.5 billion, and TSMC also generates impressive margins with an operating margin of 47.6% in the third quarter, showing its wide economic moat in the industry. The company looks poised to capitalize on continuing demand for AI chips since it handles roughly 90% of third-party manufacturing of advanced chips and works closely with companies like Nvidia on production. TSMC itself touts its "leading-edge logic, memory, and packaging technologies," and its chips go into a wide range of devices, including servers in the data center and edge devices like smartphones and appliances. While there's still some uncertainty in the AI boom, demand is likely to grow over the next several years. TSMC seems better positioned to capitalize on it than other AI stocks on the market. The stock has nearly doubled in 2024 but has more room to run as it trades at a reasonable price-to-earnings ratio of just 33. 2. Upstart Upstart (UPST -5.62%) is still well below its peak during the pandemic, meaning the stock has largely been forgotten even as it's started to rally again this year. Upstart uses proprietary AI technology to determine creditworthiness to originate consumer loans, and it claims that its technology is significantly better than traditional FICO scores. The company has also seen a recovery in its business, which it attributes to improvements in its model. Management noted that Model 18, its latest update, drove large conversion improvements in the third quarter, meaning more applicants ended up receiving loans. Upstart's business model is also a reminder that there are opportunities in AI beyond just generative AI. Beyond its own competitive advantage in loan originations, Upstart has significant upside potential because interest rates should eventually come down, encouraging more borrowing, potentially lifting the business to its earlier peak as demand for loans surged during the pandemic. While the company is sensitive to the macroeconomic environment, AI remains the key to unlocking the potential of the business as disrupting the broader loan ecosystem and serving as the de facto creditworthiness measurement would generate huge returns for Upstart, which is valued at just $6.5 billion. The business has returned to growth with revenue up 20% to $162 million in the third quarter, though Upstart is not currently profitable. However, there's a lot of potential for margins to scale up as the business grows.

Top 4 AI Stocks Set To Surpass Apple Stock By 2025

Apple remains at risk to be outperformed by AI companies amid the tech's recent rising adoption. The burgeoning adoption of artificial intelligence (AI) has emerged as a powerful driving force for many companies. As tech giants race to capitalize on markets leveraging this newly emerged technology, AI has also become a hot topic for investors. Listed below is a brief overview of the top 4 AI stocks investors may want to buy amid the recent global frenzy because of this technology, with market experts believing that some of these stocks may even surpass Apple (AAPL) by next year. Notably, amid the rising global adoption of AI, firms related to the technology have seen a phenomenal rise in market value. Namely, tech giants such as Alphabet, Microsoft, Nvidia, and Meta Platforms are some of the pioneers that have capitalized on this emerging technology. Intriguingly, with the broader industry eyeing further widespread adoption ahead, these top AI stocks remain poised to potentially outperform that of the leading tech giant Apple. Let's delve deeper into the nitty gritty, indicating that Alphabet, Microsoft, Nvidia, and Meta Platforms stocks may outperform that of Apple by 2025. The GPU manufacturing giant Nvidia has recently stolen the spotlight across the AI sector with its attention-nabbing advancements. Particularly, as CoinGape earlier reported the AI chip manufacturing giant had already surpassed Apple with a market valuation of over $3 trillion, and market sentiments orbiting the firm's outlook remain bullish globally. The NVDA stock price as of press time rested at $137.822, up nearly 186% YTD. The stock's phenomenal rise alongside growing AI adoption has underscored the immense potential for further gains. Also, it's noteworthy that Nvidia's latest AI chip, the GB200 Grace Blackwell Superchip, which was introduced at the 2024 GTC AI conference, has further cemented the firm's standing in the sector. Google's parent company, Alphabet's stock, is another prominent mark on investors' radars. As the leading search engine giant continues to incorporate new AI-related features for its users across the globe, it remains one of the top AI stock closely eyed by investors. Also, Google's Gemini, another marvel showcasing the firm's generative AI capabilities, recently saw the launch of its version 2.0. This saga has further garnered significant attention toward the Alphabet AI stock, underscoring the potential for further gains amid industry advancements. GOOG stock price traded at $197.50 at the time of reporting, up nearly 41% YTD. Market watchers continue to eagerly monitor the stock, anticipating further gains with the widespread adoption of the newly emerged tech. A name closely associated with OpenAI, Microsoft is another AI stock for investors to buy as the global race for the tech heats up. The company gained substantial popularity following its major backing of Sam Altman's OpenAI. Moreover, the firm was reportedly seen acquiring nearly half a million Nvidia AI chips this year in an effort to build artificial intelligence systems. Overall, the AI firm has marked a monumental stride, fueling optimism over its stock's future potential. At the time of reporting, MSFT stock price traded at $437.69, up 18% YTD. The company showcases the potential for further growth in light of rising AI adoption. Meanwhile, another prominent name in the sector, Meta Platforms, has emerged on investors' radars. The company primarily focuses on fostering AI-related services, boasting a 500 million monthly active user base as of the third quarter of this year. With its widespread reach and the broader industry's rising popularity, investors remain optimistic about META's stock performance ahead. As of press time, META price rested at $603.28, up 74% YTD. The AI stock is another investment opportunity for investors to make more gains than gains made via AAPL. Also, it's worth mentioning that the abovementioned American companies remain poised to benefit the Trump presidency. With Donald Trump appointing David Sacks as the Crypto and AI strategist, hopes are further building for the broader industry's future. In other words, with the ever-evolving tech space, it appears that these top AI stocks are poised to witness robust growth ahead. Considering the developments in the market, it appears that these firms will dominate the AI as well as the technology space ahead.

These Are the 5 Top-Performing Stocks in the S&P 500 With 2024 Almost Over | The Motley Fool

The S&P 500 index is up 25% year to date, and it's no surprise to see several of the biggest gainers in 2024 were companies benefiting from the growth in artificial intelligence (AI). Here are the top five performers through the market close on Dec. 23, 2024. Palantir Technologies (PLTR -0.29%) shares have had an incredible run since bottoming out with the broader market sell-off in 2022. After the stock nearly tripled in 2023, accelerating revenue growth for the company's AI software sent the stock up 370% year to date. Vistra (VST 0.52%) stock is up 265%. The power generation company reported strong financial results, with revenue and net income up 13% and 38%, respectively, through the first three quarters of the year. Vistra is expected to benefit from the buildout of power-hungry data centers, which could result in higher power prices. Nvidia (NVDA -0.21%) shares were up 182%. The AI chip leader reported a 94% year-over-year increase in revenue in the most recent quarter. The insatiable demand for advanced AI chips is expected to deliver another solid year of growth in calendar 2025. GE Vernova (GEV -1.22%) shares are up 146% following its spin-off from General Electric in April. Investors are seeing great potential for the company to benefit from what management sees as a "super cycle" in power grid infrastructure, driven by growing power needs, energy security, and investment. The fifth best-performing stock was Axon Enterprise (AXON -1.18%), rising 141% year to date. The law enforcement technology company delivered its 11th consecutive quarter of growth above 25%, with revenue up 36% year over year in Q3, driven by demand for its Taser 10 and related products. The top-five list will likely look different next year. Some momentum stocks are now trading at expensive valuations that could limit their gains in 2025. All of the top gainers for 2024 were underappreciated; that, in part, led to their stellar run. The stocks that are currently trading at reasonable valuations ahead of improving financial results could help you find tomorrow's winners.

Nvidia Dominated the 2024 AI Boom, Will 2025 Be the Same? | Investing.com UK

As Nvidia eyes 2025, its innovative roadmap and market dominance face tests from competition and oversight. In a year that redefined the artificial intelligence landscape, Nvidia Corporation (NASDAQ:NVDA) emerged as the undisputed champion of the semiconductor industry, transforming from a gaming graphics powerhouse into the backbone of the AI revolution. The company's meteoric rise is reflected in its stock price and its growing influence across the technology sector. Nvidia's journey through 2024 was marked by unprecedented milestones, most notably becoming the world's most valuable company in June when it briefly surpassed Microsoft (NASDAQ:MSFT) with a market capitalization of $3.3 trillion. The company's stock delivered staggering returns, climbing 182% year-to-date compared to the S&P 500's 25% gain. However, it experienced volatility in the latter part of the year, falling 15% below its all-time highs and slipping below its 50-day moving average. The company's technological achievements in 2024 reinforced its market position, highlighted by the March introduction of its Blackwell chip architecture and the October release of its NVLM 1.0 family of open-source multimodal large language models. Demand for Nvidia's H100 GPUs reached unprecedented levels, with units commanding prices between $25,000 and $30,000, leading Morgan Stanley (NYSE:MS) to report that the entire 2025 production of Blackwell chips was already sold out. Nvidia's influence extended beyond product launches, as the company became Silicon Valley's employer of choice, offering median compensation exceeding $228,000. Its addition to the Dow Jones Industrial Average in November further cemented its position as a cornerstone of the American economy. However, Nvidia's dominance hasn't come without scrutiny. The company faced an antitrust investigation by the Department of Justice alongside Microsoft and OpenAI in June, prompting increased lobbying efforts in Washington regarding AI regulation. The company navigated complex supply chain dynamics and pricing pressures throughout the year. Looking ahead to 2025, analysts remain largely optimistic about Nvidia's prospects. The company's planned entry into ARM-based CPUs for Windows systems and its growing focus on robotics and self-driving technology suggest continued innovation. While some analysts project the possibility of a $4-5 trillion market capitalization, the company faces potential headwinds from regulatory oversight and increasing competition in the AI chip market. As the AI boom continues, Nvidia's ability to maintain its technological edge while navigating regulatory challenges will likely determine its success in the coming year. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Prediction: 2 Stocks That Will Be Worth More Than Nvidia 5 Years From Now | The Motley Fool

Semiconductor designer Nvidia (NVDA 0.39%) is enjoying a golden age right now. The company has cornered the market for high-end accelerator chips used in training and running modern artificial intelligence (AI) systems. With a $3.4 trillion market cap on Dec. 23, 2024, Nvidia is (checks notes) the second-most valuable stock on the market today, behind only Apple at $3.9 trillion. Nvidia may soar even higher as the generative AI boom plays out, but things might change in a few years. Whether Nvidia's stock doubles or drops in two or three years, it could very well be back at today's price levels -- or a bit lower -- by the end of the decade. Meanwhile, I expect fellow "Magnificent Seven" stocks Alphabet (GOOG 0.81%) (GOOGL 0.76%) and Amazon (AMZN 1.77%) to build shareholder value in a more sustainable and predictable way, passing Nvidia's market value before the end of December 2029. There's nothing controversial about the idea that e-commerce pioneer Amazon and Google parent Alphabet should become more valuable over time. These innovators have a knack for changing with the times, occasionally creating brand-new business concepts and leading the charge into whatever comes next. I can't claim that Amazon invented cloud computing or same-day shipping services, but it built successful businesses around them before anybody else. Likewise, the company formerly known as Google embraced video-based social media and smartphones before they were cool. YouTube and Android are still leaders in those fields, many years later. Their target markets keep changing, usually due to macroeconomic shifts. The coronavirus pandemic boosted the business value of online retail stores and cloud computing solutions; Alphabet and Amazon soared as a result. When the health crisis subsided and people trickled back into their offices, the digital boom faded out, but these tech titans simply evolved. Both are leading names in the AI market, Amazon's overly enthusiastic shipping infrastructure upgrades gave the company a unique competitive advantage even in slower e-commerce times, and Alphabet is exploring a ton of alternative business ideas. So I expect their growth stories to develop for the foreseeable future. Your average analyst currently expects Alphabet's earnings to show a compound annual growth rate (CAGR) of 16% over the next five years. Amazon's bottom-line CAGR estimates stand at 18% for the same period. If Wall Street's growth estimates are in the right ballpark, their earnings (and market value) could more than double by the end of 2029. In other words, Amazon and Alphabet could be worth roughly $5 trillion in five years. So far, so perfectly ordinary. Amazon and Alphabet should gain value in the long run, perhaps a bit faster than the S&P 500 (^GSPC 1.10%) market index and other trackers of the stock market's overall health. The sky is also blue, and water is wet. Film at 11! But why do I expect Nvidia's rising star to grow dimmer over the same time span? Simply put, I think that the market has already accounted for several years of market-beating AI chip sales in Nvidia's current stock price. It's a pretty speculative stock these days, trading at 30 times sales and 54 times earnings. Rising any higher from this lofty point will require Nvidia to hold on to its dominant AI-chip market share, deliver massive unit volumes to its customers, and maintain its very lucrative chip prices as well. And there are serious challenges to overcome along the way. Here are some factors to consider: So Nvidia could keep rising in a speculative way for another year or two. Maybe, perhaps, conceivably. But you know what master investor Benjamin Graham said about the stock market -- it's a popularity contest in the short run and a weighing machine in the long term. You're watching Nvidia's "popularity" phase right now, and I'm not sure when it will peak. The "true value" phase could look very different, as outlined here. Meanwhile, Alphabet and Amazon strike me as really safe long-term bets with predictable stock gains in the years ahead.

3 No-Brainer Technology Stocks to Buy Right Now

Technology stocks have helped power the current bull market, which is now a little over two years old. With the average bull market lasting approximately five and a half years, this group should have some solid room to keep running. Let's examine three tech stocks that look like no-brainer buys in this bull market. 1. Nvidia In a world where computing power seems ever-increasing, Nvidia (NVDA -2.09%) remains the best company to take advantage of this phenomenon. The company is the leading producer of graphic processing units (GPUs). While originally designed to speed up graphics rendering in video games and animation, GPUs' ability to complete tasks much faster than central processing units (CPUs) has made these chips ideal for artificial intelligence (AI) training and inference. Nvidia, meanwhile, was able to form a wide moat by being the first company to develop a software platform for programming GPUs for various tasks outside of graphics rendering. As such, this became the software platform on which developers learned to program GPUs. In the years since, the company has added AI-specific tools and libraries to further increase its moat. But it is AI training's exponential need for more computing power that makes Nvidia a buy. The first version of ChatGPT was trained using 10,000 Nvidia GPUs, while newer AI models, such as Meta Platform's Llama 4, will use 160,000. Meanwhile, there is already talk that there will be 1 million GPU clusters in the near future. There will be a lot of future demand for GPUs, which, along with its strong performance over the years, is why Nvidia remains a buy. 2. Salesforce If the next stage of the AI rally is software, Salesforce (CRM -0.96%) is one of the best-positioned companies in this regard. With its customer relationship management (CRM) platform, the company has long established itself as a leader in front-office tasks. It has since moved into other areas, such as automation, analytics, and employee communication, through the acquisitions of Mulesoft, Tableau, and Slack. The big opportunity for the company, though, is with its autonomous AI agents, called Agentforce. An AI agent is a software program that uses AI to interact with its environment, collect data, and perform tasks to achieve goals. Launched in October, the company said on its early December earnings call that it was seeing strong early adoption for the solution and had already closed 200 deals with the AI agents. Meanwhile, it had thousands of potential Agentforce deals in its pipeline. Agentforce is a usage-based product that costs $2 per conversation, so the potential upside is huge as it becomes more widely adopted. For its part, the company has forecast having 1 billion AI agents deployed by the end of fiscal 2026 (ending January 2026). Meanwhile, the company recently released Agentforce 2.0, which includes a no-code platform to help users build out their own tools as well as a library of prebuilt agent skills. Agentforce 2.0 will also be able to execute actions outside its CRM suite and across any app or workflow and will be integrated into Slack. With agentic AI -- where AI agents act autonomously without constant human oversight to complete tasks -- looking to be the next big potential AI development, Salesforce stock is a strong way to play this theme. 3. SentinelOne A tech laggard in 2024, cybersecurity company SentinelOne (S -1.71%), nonetheless, has a big opportunity in front of it. The company's Singularity Platform uses AI to predict, monitor, and eliminate threats and can be deployed in public, private, or hybrid cloud environments. It competes with CrowdStrike and its Falcon platform. CrowdStrike's outage earlier this year opened up an opportunity, which SentinelOne is just starting to take advantage of, with a large Fortune 50 customer and several government customers switching to its platform. Meanwhile, the company is enjoying a nice boost by upselling its Purple AI solution, which helps analysts hunt complex security threats using only natural language prompts. SentinelOne has said it is the fastest-growing solution in its history. Despite its lagging stock price in 2024, the company has demonstrated strong revenue growth, including 28% revenue growth last quarter. Meanwhile, it trades at less than half the price of CrowdStrike on a forward price-to-sales (P/S) basis (7.0 times versus 18.8 times) despite CrowdStrike having similar revenue growth (28% for SentinelOne versus 29% for CrowdStrike last quarter). S PS Ratio (Forward 1y) data by YCharts. PS Ratio = price-to-sales ratio. However, the biggest opportunity for the company and its stock will come in the second half of 2025 when enterprise PC vendor Lenovo will begin shipping its computers with SentinelOne's Singularity Platform pre-installed. Lenovo is the world's largest PC vendor, with about a 25% market share, and sold approximately 59 million PCs in 2023. This is just an enormous opportunity for a company the size of SentinelOne.

4 of Wall Street's Most Prominent Artificial Intelligence (AI) Stocks Have Made a Shocking $1.23 Trillion Investment | The Motley Fool

Nvidia, Meta Platforms, Alphabet, and Apple have collectively spent far more on this than they have on developing artificial intelligence (AI) solutions. Roughly three decades ago, the proliferation of the internet changed the landscape of corporate America forever. The internet opened new sales channels that had previously not existed and vastly increased addressable markets, especially overseas. Since the advent of the internet, numerous next-big-thing innovations have come along promising large dollar figures. However, the overwhelming majority have, until now, fallen flat, including 3D printing, blockchain technology, and the metaverse. But after a long wait, Wall Street and investors may have their next leap forward for corporate America: artificial intelligence (AI). What makes AI so attractive is its virtually limitless long-term ceiling. AI-driven software and systems are becoming more proficient at the tasks they've been assigned, and over time have the capacity to evolve and learn new jobs without the need for human intervention. This means AI can improve productivity and lift consumer/enterprise demand in most industries around the globe. Though addressable market estimates vary wildly, as you'd expect with any early-stage innovation, the analysts at PwC believe AI is nothing short of a game changer. In Sizing the Prize, PwC is forecasting a 26% lift ($15.7 trillion) to global gross domestic product by 2030, all because of the impact of artificial intelligence. The face of the AI revolution, semiconductor colossus Nvidia (NVDA 0.39%), has shone the brightest. Nvidia has added more than $3 trillion in market value since the start of 2023 (through the closing bell on Dec. 23, 2024), and the overwhelming demand for its AI-graphics processing units (GPUs) was the core catalyst. Nvidia has been charging up to four times more for its Hopper (H100) GPU than Advanced Micro Devices is netting for its Insight MI300X chips. Further, the successor Blackwell GPU architecture offers improved energy efficiency and faster computing speeds, which should lock in Nvidia as the AI-GPU market share leader for the foreseeable future. There's no question that businesses are investing aggressively in AI. Social media maven Meta Platforms (META 1.32%) is spending in the neighborhood of $10.5 billion to purchase 350,000 Hopper chips from Nvidia to power its AI-data center ambitions. Additionally, Meta is internally developing its own AI chip for use in its data centers, known as the Meta Training and Inference Accelerator. It's a similar story with Google parent Alphabet (GOOGL 0.76%) (GOOG 0.81%), which is one of Nvidia's top customers by net sales. Google Cloud is the world's No. 3 cloud infrastructure service provider, and generative AI solutions should play a key role in sustaining double-digit growth in this high-margin segment. Similar to Meta, Alphabet is internally developing an AI chip, known as Trillium. Even smartphone-giant Apple (AAPL 1.15%) is spending big on AI innovations. But whereas Meta and Alphabet are reliant on Nvidia's superior hardware, Apple chose Google's tensor processing units to train its Apple Intelligence model. This is the recently launched learning tool designed to help iPhone, iPad, and Mac users generate information (text and images) and quickly process data. However, the money being spent on another "project" by these four prominent AI stocks dwarfs their AI investments. If you peruse the cash-flow statements for Nvidia, Meta, Alphabet, and Apple, you'll find tens of billions of dollars devoted to research and development (R&D). But there's another spending category that's collectively consumed $1.23 trillion -- yes, trillion -- in combined capital for these four prominent AI stocks over the trailing decade, ended Sept. 30, 2024. The shocking investment that Nvidia, Meta, Alphabet, and Apple have seemingly prioritized, even more than R&D in some instances, is (drum roll) share buybacks! According to calculations from S&P Global, S&P 500 companies have repurchased $7.11 trillion worth of their stock over the trailing decade, with the 20 companies completing the biggest buybacks during the third quarter of 2024 accounting for 34% of this aggregate total. The cumulative amount spent on share repurchases for the aforementioned four AI juggernauts are: Collectively, this is $1.232 trillion put to work in buybacks. If you're scratching your head and wondering why some of Wall Street's most historically innovative businesses are diverting cash away from R&D and/or acquisitions and choosing to, instead, repurchase their own stocks, there are three probable answers. To begin with, share repurchases can boost earnings per share (EPS) for companies with steady or growing net income -- and all four of these AI leaders meet this criterion. Dividing a company's net income into a declining outstanding share count should increase EPS and make it more fundamentally attractive to investors. Secondly, a steady stream of buybacks signals to investors that a company's board/management team still view their stock as a good value. Though the same thing can be said about insiders putting their money to work via open-market purchases, buybacks act as the icing while a company's operating guidance is the cake. A possible third reason Nvidia, Meta, Alphabet, and Apple have spent far more on share repurchases than they have on AI innovations might be because they have more cash and operating cash flow than they know what to do with. Over the trailing 12 months, the operating cash flow from these giants is as follows: These four AI leaders have the luxury of repurchasing their shares and taking risks due to their outsized operating cash flow and the mammoth cash hoards already on their respective balance sheets.

The Best Stocks to Invest $500 in Right Now | The Motley Fool

There is still much to like about these AI-powered technology stocks. The U.S. stock market has demonstrated exceptional strength in 2024, with the benchmark S&P 500 up by 26.6% as the year drew to a close. The Federal Reserve's expansionary monetary policy, rapid advancements in artificial intelligence technologies, and the increasing strength of the technology sector seem to have played pivotal roles in this growth. Not surprisingly, many AI-powered technology stocks rose dramatically in 2024, and now trade at expensive valuations. However, some of these still have huge scopes for growth. If you have even a modest amount of money that you can commit to your portfolio now for the long term -- even $500, for example -- purchasing any of these three stocks as 2025 arrives could be a smart move. Palantir Technologies (PLTR -3.72%) has emerged as a Wall Street darling for several reasons. The company's cutting-edge data mining and analytics solutions are increasingly used by government agencies and large enterprises across mission-critical environments. Since their use cases involve rigorous data integrity and confidentiality requirements, such clients tend to avoid switching to competing providers. This dynamic has helped Palantir build a sticky customer base. Palantir's Artificial Intelligence Platform (AIP) is at the heart of the company's impressive growth. It differs from other players in the artificial intelligence niche by opting for AI system implementation over model development, as models are increasingly commoditized. Instead, Palantir focuses on ontologies -- frameworks that help associate digital assets with real-world applications -- to effectively deploy AIP. The company's recent financial and operational performance has been impressive. In the third quarter, Palantir's customer base expanded by 39% year over year to 629. While U.S. revenue was up by 44%, overall revenue soared 30% to $729 million in the quarter. The company is also demonstrating improving cost efficiency. While operating expenses rose by 13.5%, revenue jumped 30%. Subsequently, the company's operating margin was also a solid 38%. Furthermore, Palantir generated adjusted free cash flow of more than $1 billion in the trailing four quarters. At this writing, Palantir trades at a lofty 70.9 times sales, far higher than its five-year average price-to-sales (P/S) ratio of 25.1. However, considering its robust AI-powered tailwinds and its recent inclusion in the S&P 500 index, the stock seems to be a compelling buy even at this elevated valuation. Leading enterprise AI player C3.ai (AI -4.26%) has also significantly improved its financial performance in recent quarters. In the company's fiscal 2025 second quarter, which ended Oct. 31, revenue rose 29% year over year to $94.3 million, exceeding the high end of the company's guidance range. This marked the seventh consecutive quarter of accelerating top-line growth. In addition, the company is also successfully reducing its over-reliance on its Baker Hughes contract. Non-Baker Hughes revenue soared 41% year over year in fiscal Q2. C3.ai is not yet profitable. However, the company is gradually reducing losses. In the second quarter, it's non-GAAP operating loss of $17.2 million was far better than its guidance for a loss of between $26.7 million and $34.7 million. The revenue momentum is set to continue thanks to the strategic alliance the company signed with technology giant Microsoft on Sept. 30. Under the agreement, which runs through March 2030, all of C3.ai's enterprise AI and generative AI services will be available on Microsoft's Azure marketplace. This deal will enable C3.ai to leverage the tech giant's market reach, which covers more than 95% of the Fortune 500. Since Microsoft's sales personnel will be incentivized to sell C3.ai's services, C3.ai will also benefit from the dramatic expansion in the sales force promoting its services. C3.ai boasts a strong balance sheet with more than $730 million in cash, cash equivalents, and investments, and negligible debt. This gives the company flexibility to invest in research and development without diluting its shareholders. Hence, although C3.ai is trading at a P/S multiple of about 14.1, far higher than its three-year average multiple of 10.7, the stock appears an attractive pick now. UiPath (PATH -2.28%) stands out as a compelling pick for 2025 for several reasons. A prominent player in the business of AI-powered robotic process automation (RPA), it's now making rapid strides in the AI agent automation space. Market research firm IDC estimates that the AI agent labor automation market will expand from zero in 2023 to almost $4.1 billion by 2028. UiPath is releasing tools and technologies to enable clients to build, maintain, and deploy AI agents for automation. This strategy is expected to lead to the introduction of automation across multiple new use cases. AI agent automation is already generating significant customer interest -- more than 1,000 organizations have signed up for the private preview of UiPath's agent builder. That's the largest number of registrations a preview in the company's history. AI agent automation is set to emerge as a major growth catalyst for UiPath in the coming years. The company differentiates itself from competition by offering AI agents and robots that can work across both legacy and new applications, which prevents vendor-locking for customers. The company also offers orchestration to manage AI agents, people, models, and robots. Finally, the company is also leveraging its low-code tools to democratize access to AI agents. As growth opportunities develop, UiPath's AI-powered automation platform is well positioned to benefit from the double-digit percentage growth rate of the RPA market. In the company's fiscal 2025 third quarter, which ended Oct. 31, annual recurring revenue soared 17% year over year to $1.6 billion. Furthermore, its dollar-based net retention rate was 113%, indicating success in retaining customers and cross-selling to them. Considering its many potential tailwinds, UiPath could be a smart long-term buy in 2025.

2 Top Artificial Intelligence Stocks to Buy in January | The Motley Fool

Finding top artificial intelligence (AI) stocks to buy right now is not a simple endeavor. Many AI stocks have boomed amid the release of a vastly improved version of ChatGPT in early 2023. Due to that growth, stocks like Nvidia and Palantir experienced outsized increases over a short period. Those increases may leave investors wondering what to buy now. Fortunately, even if finding the "best" AI stocks is elusive, we can assume AI will probably drive stock gains for years to come, meaning investors have not missed out. Under current conditions, these two stocks are likely to become leaders in AI and bring their shareholders significant gains. Amid the AI-driven gains in many stocks, investors seem to have forgotten about Qualcomm (QCOM -0.81%). Indeed, the smartphone chipset leader has suffered as the 5G upgrade cycle has run its course. Additionally, Apple has worked for years to develop a 5G modem chipset that can run its iPhone. After years of throwing in the towel and extending its contract with Qualcomm, Apple appears ready to end the supply agreement after 2026. Nonetheless, Qualcomm has advanced AI in its chipsets beginning with the Snapdragon 8 Gen 3, which incorporates AI capabilities into smartphones. That and the upcoming Snapdragon 8 Gen 4 could lead to another upgrade cycle. Moreover, Qualcomm has prepared for years for the day when smartphone chipsets will become a less reliable revenue source. To that end, it has built businesses in the Internet of Things, automotive, and, more recently, entered the PC business. These moves have helped growth turn positive again as the $39 billion in revenue generated in fiscal 2024 (ended Sept. 29) rose 9% compared to year-ago levels. During that time, Qualcomm curtailed increases in costs and expenses, allowing net income of $10 billion in the fiscal year to rise by 40% yearly. For now, analysts forecast that revenue growth will stay in the 9% range for fiscal 2025. However, with the stock selling at a P/E ratio of just 17, investors may be overreacting to its slower growth rate, especially considering AMD's earnings multiple of 109. Also, Apple sells at 42 times earnings, and even its primary manufacturer, Taiwan Semiconductor Manufacturing, trades at a 31 P/E ratio. This implies Qualcomm stock could rise from multiple expansion alone. Also, given that Qualcomm anticipates lost business from Apple, the company has figured that into its fiscal 2025 estimates. Such an assumption likely sets up Qualcomm stock to surprise to the upside, meaning investors should profit as the company continues its growth. Another tech company underappreciated for its AI is Google's parent company Alphabet (GOOGL -1.45%) (GOOG -1.55%). This might seem surprising for a company that has incorporated AI in its applications since 2001. Still, the emergence of ChatGPT presents Google Search with its most serious competitive threat in years. Also, the release of its own generative AI product, Google Gemini, has not stemmed fears that the lost search business will hamper its lucrative advertising business. However, investors should not ignore Alphabet's vast resources and innovation. Currently, it holds a staggering $93 billion in liquidity. That is down from $111 billion at the end of 2023, but the Google parent now funds a dividend and has made significant investments in research and development, setting the stage for a possible resurgence. That investment not only includes AI but also spending on a technology that could supercharge AI, quantum computing. To this end, Alphabet just released its Willow quantum computing chip. Quantum computing could redefine the computing industry. Instead of holding a zero or one value like a traditional data bit, qubits, or quantum bits, process zeroes and ones simultaneously, exponentially increasing computing speeds. Willow is so fast that it performed a computation in under five minutes that a traditional computer could not perform in the entire history of the universe. Additionally, Willow made breakthroughs in addressing the error-prone nature of quantum chips. Instead of error rates rising as the number of qubits increases, Willow can reduce errors as the number of qubits grows. This addresses a key obstacle to making quantum computing technology viable. Also, for all the worries about the company, Alphabet generated $62 billion in free cash flow in the first nine months of 2024 alone. That cash gives the company considerable flexibility to continue innovating. Furthermore, Alphabet's P/E ratio of 25 gives it the lowest earnings multiple of the "Magnificent Seven" stocks. That valuation is less likely to stay at that level as more investors recognize the company's ability to move beyond Google Search.

Four AI predictions for 2025

There was nothing new in AI in 2024 that matched the sheer "wow" factor of using ChatGPT for the first time, but rapid improvements in the underlying technology still kept the field humming. For 2025, this is how I see things panning out. In 2025, that momentum will fade. Even some of the tech industry's biggest optimists have conceded in recent weeks that simply throwing more data and computing power into training ever-larger AI models -- a reliable source of improvement in the past -- is starting to yield diminishing returns. In the longer term, this robs AI of a dependable source of improvement. At least in the next 12 months, though, other advances should more than take up the slack. The most promising developments look like coming from models that carry out a series of steps before returning an answer, allowing them to query and refine their first responses to deliver more "reasoned" results. It is debatable whether this is really comparable to human reasoning, but systems like OpenAI's o3 still look like the most interesting advance since the emergence of AI chatbots. Google, which regained its AI mojo late in the year after spending two years struggling to catch up with OpenAI, also showed how the new agent-like capabilities in AI could make life easier, such as tracking what you do in your browser and then offering to complete tasks for you. All these demos and prototypes still need to be turned into useful products, but they at least show that there is more than enough in the labs to keep the AI hype going. For most people, the rise of generative AI has meant constantly seeing prompts offering to complete your writing for you or edit your photos in ways you hadn't thought of -- unsought, occasionally useful tools that fall well short of transforming your life. Next year is likely to bring the first demonstrations of apps that can intervene more directly: Absorbing all your digital information and learning from your actions so that they can act as virtual memory banks or take over entire aspects of your life. But, concerned about the unreliability of the technology, tech companies will be wary about rushing these out for mass use -- and most users will be equally wary about trusting them. Instead of true killer apps for AI, this means we'll be left in the "AI in everything" world that technology users have already become accustomed to: Sometimes intrusive, sometimes helpful, and still not quite providing the really new experiences that would prove the AI era has truly arrived. The chipmaker's huge profits have made it the target of the most powerful tech companies, most of which are now designing their own AI chips. But Nvidia has been moving too fast for rivals, and while a quarter or two could be bumpy as it goes through a major product transition, its Blackwell product cycles should carry it through the year comfortably ahead. That doesn't mean others won't make inroads. According to chipmaker Broadcom, three of the biggest tech companies are to use their in-house chip designs for supercomputing "clusters" with 1mn chips each in 2027. That is 10 times the size of Elon Musk's Colossus system, thought to be the largest cluster of AI chips currently in use. Even as its market share starts to erode, though, Nvidia's software still represents a considerable moat for its business, and by the end of the year it should be on the verge of another important new product cycle. With Big Tech in the midst of an AI race that its leaders believe will determine the future shape of their industry, one of the main forces behind the AI capital spending boom will remain in place. Also, as some companies start to claim big -- if unproven -- results from applying the technology in their own businesses, many others will feel they have to keep spending, even if they haven't worked out yet how to use AI productively. Whether this is enough for investors to keep throwing their money at AI is another matter. That will depend on other factors, such as the stock market's confidence in the deregulatory and tax cutting intentions of the new Trump administration and the readiness of the Federal Reserve to continue with monetary policy easing. It all points to a highly volatile year, with some big corrections along the way. But with enough liquidity, Wall Street could succumb to AI hype for some time yet.

3 Phenomenal Reasons to Buy Nvidia Stock Before 2025 | The Motley Fool

Nvidia (NVDA -0.21%) had two phenomenal years in the market, and I doubt that it will be able to repeat its performance in 2025. However, I still think there are plenty of good reasons to own Nvidia stock (or buy more) in 2025. Although there are numerous reasons, I've come up with three solid ones that convinced me to pick up some Nvidia shares before 2025 arrives. Most of Nvidia's growth has been centered around its Hopper architecture. While this design allowed for some incredible accomplishments, Nvidia's next-generation architecture, Blackwell, will be a whole new world. Blackwell has numerous improvements over Hopper, but perhaps the most useful is that Blackwell can train artificial intelligence (AI) models at more than twice the speed. That's a huge advantage for anyone training AI models, and for companies with nearly unlimited budgets in the AI arms race, it could be a reason to upgrade existing capabilities in 2025. While Blackwell GPUs are already shipping in 2024, management noted that demand far outpaces production capacity, and expanding production to capture those sales in 2025 will be key. Blackwell GPUs are slated to be a huge boost for Nvidia in 2025 and will help drive further sales growth. To go alongside Blackwell sales in 2025, Nvidia's largest clients already told investors they will spend more on AI computing power and cloud computing capacity next year. Meta Platforms warned investors in its third-quarter earnings announcement that they should "expect significant capital expenditures growth in 2025." This is centered around Meta's AI computing power buildout, which will significantly benefit Nvidia. Amazon, which has the largest cloud computing business with AWS, stated on its conference call, "The thing to remember about the AWS business is the cash life cycle is such that the faster we grow demand, the faster we have to invest capital in data centers and networking gear and hardware." In other words, because AWS' revenue growth accelerated in Q3, it needs to invest more to meet the supply. With AWS' AI business growing in the triple-digit-percentage range year over year, it's clear it will need to invest in more Nvidia GPUs if it wants to permanently win potential clients' business. The demand for AI computing power has not peaked, which will help Nvidia maintain a solid growth rate in 2025. Valuing Nvidia's stock over the past few years wasn't easy. While you could use forward-looking metrics, there has never been a company the size of Nvidia that was growing as quickly and as profitably. However, Nvidia's growth slowed, even though Wall Street analysts still project revenue to grow by 51% next year. Still, this growth level allows investors to apply more traditional earnings multiples to the stock, and it looks pretty attractive right now. Nvidia's stock trades for 53 times trailing earnings and 30 times fiscal year 2026 earnings (ending January 2026). While those are still historically expensive measures, they are not all that expensive compared to other stocks in the market. Apple and Microsoft trade for 42 and 36 times trailing earnings, respectively. That's not that much cheaper than Nvidia, despite both companies growing at a far slower pace. Nvidia's stock really isn't all that expensive for the growth in store for 2025 (encompassing most of Nvidia's fiscal 2026). Investors shouldn't be afraid to add some Nvidia shares while the stock is off from its highs, as it looks like a great bargain heading into 2025.

Nvidia delivered an encore performance in 2024. What stands in the way of a three-peat

The dramatic ascent of artificial intelligence giant Nvidia has sustained for two years. The stock's climb in year three depends on Blackwell, its next-generation AI chip platform. Year-to-date performance: up 174% Forward price-to-earnings multiple: 32.7 versus a five-year average of 40.4 Our rating: Buy-equivalent 1 Our price target: $165 a share NVDA YTD mountain Nvidia YTD '24 look back Nvidia followed up its remarkable 239% leap in 2023 with an encore performance. It all boils down to the fact that we continued to see massive investments into AI across the tech industry, leading to blistering revenue and earnings growth for a second straight year. Key customers including Microsoft , Google parent Alphabet and Amazon shelled out billions of dollars on AI-related capital expenditures, with much of the money making its way into Nvidia's coffers. There were patches of volatility -- in fact, the stock saw multiple drawdowns of roughly 20% or more -- but eventually, the buyers returned as optimism on Nvidia's future and AI adoption more broadly won out. December has brought more volatility, with the stock falling into correction territory before bouncing yet again. As of Friday, shares were up roughly 6% from their most recent low close of $128.91 on Dec. 18. '25 look ahead In the new year, Nvidia will be ramping up the rollout of its next-gen chip platform Blackwell, the successor to its wildly popular Hopper architecture. Investors will be closely watching how this transition unfolds -- are there any hiccups that delay when revenue is recognized? How will gross margins hold up during this process? Nvidia has said demand for Blackwell is expected to "exceed supply for several quarters" in its fiscal year that starts in February, so clues on when this mismatch is resolved will be in focus, too. Some of Nvidia's burgeoning opportunities -- specifically, its software business and partnerships with countries outside the U.S. on "sovereign AI" -- may also be harder to overlook in the new year. Another thing on Jim Cramer's radar is whether new types of AI-enabled hardware, such as robots, emerge. "I think '25 will be a big year for Nvidia," Jim said recently. "And I think Blackwell is going to ship in volume. I think people are forgetting what Blackwell does, which is video. When you have video, you can do robots." As important as Blackwell is, Nvidia also is expected to provide a glimpse at its upcoming Rubin architecture at its much-hyped GTC conference in March. It's the same venue that Nvidia used in 2024 to showcase Blackwell. Risks to the Nvidia story in 2025 include an escalation of U.S.-China tensions -- given semiconductors have in recent years become a geopolitical cudgel -- and stumbles in the Blackwell ramp. Competitive dynamics around the adoption of custom AI chips remains something to watch. Right now, it seems like that is a bigger issue for fellow Club stock Advanced Micro Devices than market-leading Nvidia, but it still cannot be ignored. "Sure, every company wants to be less hostage to Nvidia. Maybe one day they will, but that day is nowhere near here," Jim said on the December Monthly Meeting. (Jim Cramer's Charitable Trust is long NVDA and AMD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Is Apple's decade-old leadership under threat? These two AI stocks can outsmart it and surpass its market cap in 2025

Apple's current leadership is currently under a strong risk of losing its administrative stronghold based on the strict amount of competition it is receiving from other companies who are also battling it out against hem at the US stock market. This is how things can go worse for Apple this 2025Apple has the immense capability to surpass the market cap target cap of $4 trillion in 2025, and even touch $5 trillion in 2026, but it needs to stay way of two other top AI stocks that have the ability to topple the tech giant from its position, if things go wrong. Apple is current he most valued company in terms of market cap and overall volume, backed by its superior Apple intelligence service that it is offering to its users. However, if they do not keep cautious about the market conditions, they may end up losing their place to the likes of Nvidia and Google, who are also working on similar researches and services in the field of AI. Nvidia has once, already crossed Apple's market cap, and is quite close to touching the $4 trillion mark themselves, with Google also following the same pursuit. The are 17% implied upside to Nvidia's stocks in 2025, according to The Motley Fool's latest predictions, which is definitely not great news for Apple, as this would mean that there is a strong chance that the Jensen Huang-led company would beat Apple at their own game in the later part of 2025, provided that the AI overhype still continues. Meanwhile, on similar line's Google has nearly 67% implied upside, which clearly demonstrates it has the ability to rule Wall Street if the iPhone makers are not cautious enough in the coming days. The iPhone SE 4 sales and the upcoming Apple device sales in 2025 and 2026 are very important for Apple to keep thriving and getting closer to higher market cap marks, faster than these other two companies.

Palantir, Salesforce, And Snowflake Made The Cut, But 2 'Magnificent 7' Giants Left Out From Dan Ives' Top 10 Tech Winners For The AI Revolution In 2025 List - Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN)

On Monday, Wedbush analyst Dan Ives unveiled his top 10 tech winners for the AI revolution into 2025, leaving two major Magnificent 7 players notably absent from the list. What Happened: In his post, Ives said that the companies are poised to ride the wave of a $2 trillion AI capital expenditure boom over the next three years. His list of top 10 tech winners for the AI revolution: Nvidia Corporation NVDA, Microsoft Corporation MSFT, Palantir Technologies Inc. PLTR, Tesla Inc. TSLA, Alphabet Inc.'s GOOG GOOGL Google, Apple Inc. AAPL, MongoDB Inc. MDB, Pegasystems Inc. PEGA, Snowflake Inc. SNOW, and Salesforce Inc. CRM. 'Magnificent 7' heavyweights Amazon.com, Inc. AMZN and Meta Platforms, Inc. META were conspicuously absent from the list. See Also: OpenAI's For-Profit Transition, Trump's AI Advisor, And Google's Code Red: This Week In AI "We expect tech stocks to be up 25% in 2025," Ives stated, adding that it will be bolstered by "a goldilocks foundation for Big Tech and Tesla" and reduced regulatory hurdles under a Donald Trump-led administration. Ives also cautioned about potential "white-knuckle moments" in 2025, citing concerns around Fed actions, China trade dynamics, and stretched valuations. However, he said, "This will create the opportunities to own the tech theme and key names which has been our core investing tech playbook the last 2 years." Why It Matters: Apple currently leads the market with an impressive valuation of $3.812 trillion, and its stock has surged by 35.85% year-to-date. Cupertino introduced Apple Intelligence this year, a robust collection of AI tools and features designed to greatly improve the user experience on its devices. Following closely is Nvidia, with a market cap of $3.367 trillion and an impressive 185.43% year-to-date increase. Nvidia is anticipated to launch its next-generation RTX 5000 series GPUs at CES 2025 scheduled for the second week of January. Microsoft secures the third spot with a valuation of $3.158 trillion. Alphabet, the parent company of Google, holds a market cap of $2.350. Amazon rounds out the top five with a valuation of $2.326 trillion, while Meta and Tesla are at number seven and eight with a market cap of $1.492 trillion and $1.339 trillion, respectively. Image via Shutterstock Read Next: Palantir Was Not Part Of 'Cool Kids Club,' Says Dan Ives, As Stock Surges 376%: 'Group Think' Mentality Of Institutional Investors Gave Retail The Edge Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs