Introduction
AI stocks is a broad term that refers to any stock related to the growing artificial intelligence market and businesses. Around the globe, investors and financial analysts are paying attention to their development and impressive growth, especially after AI’s breakthrough into mainstream financial conversations.
The common belief is that AI and almost everything related to it has the potential to shake entire industries and change the way our companies operate at their core. With that in mind, investors are focused on finding the best AI opportunities to add to their portfolios at the right time.
In this article, you’ll find more about investing in AI stocks, top companies to keep in mind, and risks to consider before committing to these kinds of assets.
What are AI stocks?
AI stocks are the shares of any company that develops, integrates, or is focused on using artificial intelligence to change its business model and services in the near future.
These assets have been gaining attention from the market because of their massive potential to disrupt entire industries and change the power structure of our technological landscape.
With AI, businesses of many different kinds hope to reduce costs, increase efficiency, and find new ways to profit and serve their customers.
Since we are still in the early stages of AI development and integrations, AI stocks have a potential for growth that interests many investors, especially the ones focused on long-term massive gains.
Types of AI-related stocks
There are basically three types of AI stocks to consider:
Pure AI. These are usually smaller, emerging companies whose sole focus is on developing AI solutions and innovation. Examples: C3.ai (AI) and UiPath (PATH).
Tech giants focused on AI. These are blue-chip huge technology companies that are using their capital to invest in AI and develop innovation. Examples: NVIDIA (NVDA) and Microsoft (MSFT).
Businesses incorporating AI. These are companies leveraging their operations with AI to reduce costs and improve quality overall. Examples: Amazon (AMZN) and Meta (META).
In short, many companies of different sectors are tapping into the growth potential that can be powered by AI.
Should you invest in AI stocks?
This will ultimately be a personal choice incorporating your long-term goals, beliefs, and tolerance to risk.
However, it is a fact that AI stocks have a long-term potential to expand and offer significant gains. After all, artificial intelligence is here to stay and some of the biggest companies in the world are investing billions in the development of this new era of technological advancement.
Another key factor is that AI won’t only impact the tech sector. We are already seeing various industries getting results with AI, including healthcare, finance, manufacturing, and retail.
Nevertheless, it’s also important to consider that this is still a relatively new market and therefore has more volatility and drastic changes.
Not every AI company will succeed and we’ll only know in the future who are going to be the winners in this race.
Also, governments will likely impact the development and structure of AI usage, with valid concerns relating to privacy, job replacements, regulations, and many more.
In summary, AI stocks can be an important addition to your portfolio for long-term growth but don’t forget to consider market changes, industry news, and risks associated with each different company.
Promising AI stocks in 2025
If you do decide to invest in AI stocks, here are some of the major companies to consider:
1. Nvidia Corporation (NVDA)
NVIDIA has become a major player in the AI industry. The company produces high-performance Graphics Processing Units (GPU) that are crucial to providing all of the computing power necessary for AI training and more.
If before these GPUs were primarily used to render video games, now they have become the standard in data centers and are used to power famous models like ChatGPT.
Since NVIDIA basically provides the necessary infrastructure for AI, the company has seen a major increase in revenue and stock prices.
2. Microsoft Corporation (MSFT)
Microsoft is a big investor in OpenAI and has integrated AI technology in products like Azure (cloud services), copilot for Office 365, and Bing.
Azure specifically has become an important division of Microsoft, with its customers being able to use the platform to build their personalized AI-powered services.
With large capital to invest and the maturity of many different types of products, Microsoft is a key player in funding AI technology and also using it to improve its existing solutions.
3. Alphabet (GOOGL)
Alphabet has been focusing on AI for a long time, way before it became the buzzword that it is today.
Being a giant in search, cloud services, internet content, and advertising, Alphabet is in a privileged position to use AI to enhance all of these products and more.
Today, AI is already used in products like Gmail (spam filters) and YouTube (video recommendations). But the company is also focusing on many more different areas like robotics and self-driving cars.
4. Meta Platforms (META)
Being a social media and online advertisement giant, Meta is integrating AI into Facebook, Instagram, WhatsApp, Threads, and more.
Content recommendations and targeted ads are improving with the use of AI, generating more revenue and consumer retention.
Meta also uses AI in its metaverse development, being a pioneer in different digital experiences that could get more mainstream in the future.
5. Amazon (AMZN)
Amazon is already using AI in many of its solutions, including Amazon Web Services (AWS), voice assistants (Alexa), and as a powerful recommendation tool in their retail e-commerce.
CEO Jeff Bezos has been an AI enthusiast for a long time and Amazon’s focus on integrating AI in their solutions proves that sentiment.
Specifically, when it comes to AWS, Amazon provides AI-powered cloud computing and machine learning services.
Other ventures include stores without cashiers, drone delivery, and robotics.
6. Tesla (TSLA)
A leader in electrical cars, Tesla is also planning to redefine the world's transportation with AI-powered self-driving technology.
There are also significant investments in robotics, including the concept of “robo-taxis”, and energy storage.
The CEO Elon Musk has been a controversial figure, but many believe in his views to change key industries in our society.
7. Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semi is the world’s largest semiconductor foundry, producing chips for NVIDIA, AMD, Apple, and AI startups.
Like NVIDIA, Taiwan Semi is in a privileged position to be producing high-performance products that are necessary for the development of AI.
As demand for AI technology keeps growing, it’s likely that Taiwan Semi will strengthen its position as a chip manufacturer leader.
8. Adobe (ADBE)
Adobe is a world leader when it comes to software for creative professionals. Integrating AI with its famous tools like Photoshop, Illustrator, and Premiere can be a game changer in the way we create digital content.
It’s likely that AI will greatly improve automation for content creation and editing, positioning Adobe even more as the go-to solution for businesses when it comes to advertising and AI-generated content.
9. Arista Networks (ANET)
Arista provides high-speed networking tools for cloud data centers. Since AI development requires high-performance networking, Arista is also in a privileged position, like NVIDIA and Taiwan Semi, to support innovation as a key infrastructure provider.
Their partnership with major AI businesses and the crescent demand for networking solutions means the company will likely keep growing as well.
10. Advanced Micro Devices (AMD)
AMD is the main competitor to NVIDIA in AI Graphic Processing Units (GPUs) and data center processors.
Some people worry about NVIDIA’s dominance in producing chips for AI development and AMD is the candidate that could best challenge that position.
How to invest in AI stocks
If you’re brand new to investments, the first step is opening your account with a reputable brokerage.
After that, the process will be the same as any kind of stock. You’ll need to deposit the funds for investing, research the stocks, choose the best option for you, and buy.
As with any investment, it’s important that you monitor and manage your assets over time. Depending on your strategy, the frequency for that will be higher or lower, but it’s key to at least be aware of major industry news and trends.
Especially with AI, things can change rapidly, and although it’s crucial to avoid panic selling in times of uncertainty, you should be following the overall performance of your stocks.
Trade nowDifferent ways to invest in AI stocks
The table below demonstrates some strategies for investing in AI stocks depending on your preferences:
Investment strategy | Description | Best for |
Individual AI stocks | Shares of specific AI companies | Investors who want better control over their choices |
AI ETFs (Exchange-Traded Funds) | A diversified fund containing shares of many AI companies | Beginners or investors who prefer less risk |
AI mutual funds and index funds | Professionally managed funds that give large exposure to AI companies | Beginners or long-term investors who prefer more of a hands-off approach |
Startups and small-cap stocks | Cheaper shares of emerging AI companies | Investors who prefer a high-risk high-reward style |
In summary, there are many different ways of investing in AI stocks if you believe they have great potential. Analyze your goals and preferences, and you should be able to create a manageable plan for your investments.
Risks of investing in AI stocks
Every investment has associated risks and it wouldn't be different with AI stocks. However, AI is a little different nowadays in the sense that it is a highly hyped market, with everyone talking about the “hottest” tip of the day and creating a sense of urgency that potentially could harm new investors.
It’s important to keep in mind that this is a market still defined by volatility and hyped trends, and you should keep a priority to do your own research and due diligence if you decide to invest in it.
Another factor that will impact AI and its businesses, it’s the regulatory and ethical concerns in AI development, potentially changing the way AI companies operate and how they profit.
Lastly, with every new and exciting technology, there are a lot of competitors in the beginning, but it’s impossible that everyone will win. It’s smart to prioritize diversification so you can minimize your risk of betting on the wrong horse.
Are AI stocks worth the hype?
It’s true that AI stocks are changing the financial world and have a real potential for massive growth. They represent a dramatic change in the way our industries operate and perhaps in the way we work and live as a society.
The most important tip might be to avoid making decisions based solely on hype and to do your own homework in every company you decide to invest in.
In the next few years, we might have a clearer view of our tech landscape, but it’s possible to start investing safely today if you believe that’s the right move, as long as you keep being mindful of market fluctuations and exaggerated hype.
Summary
AI stocks are shares of AI-related companies and they have a huge importance nowadays in our financial markets.
They have the potential for substantial growth in the near future and many investors are keeping a close eye on AI-leading companies like NVIDIA, Microsoft, and more.
If you decide to invest in them, remember to do your research, prioritize diversification, and stay updated on AI market changes.
Start trading today! Open your account with FBS and access a powerful platform with everything you need to trade easily.
