Increased volatility is beginning to sway the stock market. Uncertainty over economic policy and geopolitical tensions has cooled the broader market. The S&P 500 briefly dipped into a correction, while the more technology-heavy Nasdaq Composite remains about 12% off its highs.
In 2023 and 2024, the market had a relatively smooth upward ride, but dips and even extended downturns do occur from time to time and are healthy. When stocks go straight up, market bubbles form, and it can be extra painful for the market and the economy when they eventually burst.
The key to winning in the stock market is to zoom out and think about the years (not months) ahead. Artificial intelligence (AI) is here to stay, and there will be big winners who generate outsized returns over the next decade. Three Motley Fool contributors were asked to put their heads together and write about potential AI winners that investors should hone in on. They landed on Meta Platforms (META 2.33%), Qualcomm (QCOM 0.91%), and Amazon (AMZN 2.61%).
Here are the pitches for each.
Meta's decision to open-source its AI models could reward the company for years to come
Justin Pope (Meta Platforms): Social media giant Meta Platforms started 2025 with a bang, but the market's recent pullback essentially wiped out all those gains. Here is why investors should be giddy about the opportunity to buy this dip.
The company has leaned hard into AI. Meta's AI model, Llama, is among many competitors, including OpenAI's ChatGPT. However, while most companies tried to monetize their AI models early on, Meta open-sourced Llama, making it free and readily available to developers.
The result? Meta recently announced that Llama had surpassed a billion global downloads. This gives Llama an inside track to market share, and I suspect that, eventually, AI models will consolidate, and unpopular models will fade away. As a market leader, Meta can begin monetizing Llama more significantly. In other words, it used the same playbook as its social media apps: Focus on capturing the market first, and you can make more money later.
NASDAQ: META
Key Data Points
In the meantime, Meta is aggressively investing in building data centers and resources to capture its AI opportunities. Management noted on Meta's fourth-quarter earnings call that it plans to spend $60 billion to $65 billion on capital investments this year, primarily AI. Fortunately, the company's core business (ads sold through social media) is thriving. Meta's apps (Facebook, Instagram, WhatsApp, Threads) grew to 3.35 billion daily active users in Q4, and its price per ad rose 10% in 2024 versus 2023.
Meta's advertising business can continue carrying water while the company allocates immense resources to AI, a luxury few companies have. Analysts estimate that Meta will grow earnings by an average of 17% annually over the long term. The stock has dipped approximately 18% from its high, bringing the price-to-earnings (P/E) ratio down to about 25. That's an appealing valuation, given Meta's growth prospects and potential leadership in AI as Llama becomes the foundation for AI applications worldwide.
Low-cost AI could help this chip stock connect with investors
Will Healy (Qualcomm): After more than four years of range-bound trading, it could finally be Qualcomm's time over the next decade. The smartphone chipset maker prospered early in the decade amid a spike in semiconductor demand and a 5G upgrade cycle. However, the stock's performance began to stagnate as the upgrade cycle ran its course and demand fell.
Qualcomm attempted to spark a new upgrade cycle by releasing its AI-enabled Snapdragon 3 Gen 8 mobile processor. That move has been partially successful. Revenue growth has come in at double-digit levels in the last three quarters but has not matched the 32% revenue increase reported in fiscal 2022 (ended Sept. 25, 2022).
NASDAQ: QCOM
Key Data Points
Still, that could soon change. Thanks to DeepSeek's breakthrough, organizations can run AI models at much lower costs. That development could stoke further demand for smartphone chipsets, which still comprise 65% of Qualcomm's overall revenue.
Moreover, Qualcomm continues to prepare for the day when smartphone demand falls. It has also pivoted into the Internet of Things (IoT) and developing processors for mobile PCs.
Nonetheless, its biggest splash could come from its move into automotive. Its automotive segment focuses on using its technology to create safe, intelligent, and connected vehicles. Although this segment claimed only 8% of Qualcomm's revenue in fiscal Q1, the 61% revenue increase indicates it could become a major player in the connected and autonomous vehicle markets.
Admittedly, investors may have hoped for more profit growth when the $3.2 billion it earned in fiscal Q1 grew by only 15%. However, at a P/E ratio of 17, the stock is a bargain compared to other leading-edge semiconductor stocks. As demand for AI-enabled smartphones rises and the autonomous vehicle industry takes off, it could spark the next bull market in Qualcomm stock.
Amazon's innovative use of AI should help it on both the top and bottom lines
Jake Lerch (Amazon): When looking at extended time horizons, like 10 years from now, it's important to contextualize where the world stands and where it is headed. In that respect, the world remains in the very early innings regarding AI.
Generative AI products like ChatGPT and Midjourney broke through to the mainstream just over two years ago. Yet, it's taken more time for large-scale organizations to mobilize for the AI revolution. That offers an opportunity for companies likely to reap the benefits as enterprises ramp up their own use of AI.
NASDAQ: AMZN
Key Data Points
As the world's leading cloud services provider, Amazon is well-positioned to capitalize on the growth of AI. The company is investing $100 billion to bolster Amazon Web Services (AWS) to retain its place as the premier choice within the cloud market.
What's more, the company has several other AI initiatives in progress, including:
- Trainium: Amazon's proprietary AI chips used for training and deploying AI models.
- Anthropic: An AI start-up that Amazon has funded to the tune of $8 billion.
Perhaps even more importantly, the company can also leverage AI internally to drive efficiencies within its enormous e-commerce network. For example, Amazon already uses AI in several ways, which could be expanded over the next decade. Right now, the company uses AI to:
- Improve product recommendations on search pages.
- Manage inventory on its distribution network and at fulfillment centers.
- Optimize shipping routes for package delivery.
- Provide customer service through chatbots.
- Direct over 750,000 robots used extensively in the company's fulfillment centers.
As the AI revolution rolls on, Amazon should not only bring in new business thanks to its AI innovations but also utilize AI to become more efficient, driving up its own profit margin. And that's why investors would be wise to stick with Amazon stock for the long term.
