Over the past decade, more companies recognized the disruptive potential of artificial intelligence (AI) applications across multiple industries. AI services could be used to automate repetitive tasks, replace a broad range of human jobs, crunch massive amounts of data, and predict future trends.
As a result, many AI-driven stocks skyrocketed. The obvious winner was Nvidia (NVDA +1.67%), which supplied most of the graphics processing units (GPUs) for processing those AI tasks. But investors shouldn't ignore the other AI-oriented companies that will profit from that secular trend. Three of those oft-overlooked stocks -- Advanced Micro Devices (AMD +0.05%), Super Micro Computer (SMCI +0.41%), and The Trade Desk (TTD 1.36%) -- could weather the near-term macroheadwinds and rush higher over the next few years.
Here's why these three AI stocks are ready for a bull run.
Image source: Getty Images.
1. AMD
AMD, the world's second-largest producer of x86 central processing units (CPUs) and discrete GPUs, generally doesn't get as much attention as Nvidia as an AI investment. However, it also sells data center GPUs for processing complex machine learning and AI tasks.
AMD launched its first batch of Instinct GPUs for data centers in 2017. It claims its latest MI325X Instinct GPUs, which arrived in late 2024, has roughly twice the memory capacity, 1.3 times the memory bandwidth, and 1.3 times the AI compute performance of Nvidia's H200 GPU. It plans to launch its even more powerful MI350 and MI355X Instinct GPUs this year.
NASDAQ: AMD
Key Data Points
AMD's Instinct GPUs cost roughly half as much as Nvidia's comparable GPUs. That makes them ideal for cost-conscious companies trying to scale up their AI services. It's also challenging Intel's Xeon CPUs with its cheaper Epyc CPUs for servers. Thanks to those chips, AMD's data center sales surged 57% year over year in its latest quarter and accounted for 49% of its top line. Its sales of Ryzen CPUs for PCs also surged as it continued to pull original equipment manufacturers (OEMs) away from Intel.
For 2025, analysts expect AMD's revenue and adjusted earnings per share (EPS) to increase 21% and 33%, respectively. It might face some pressure from the tariffs, export curbs against China, and intensifying trade wars, but it still looks reasonably valued at 24 times forward earnings. If those headwinds dissipate, AMD could command a higher valuation and climb higher over the next few years.
2. Super Micro Computer
Super Micro Computer, also known as Supermicro, produces liquid-cooled AI servers which are exclusively used to process AI applications. Its close relationship with Nvidia granted it a steady supply of the chipmaker's top-tier GPUs, and it's also installing more AMD GPUs in its systems.
NASDAQ: SMCI
Key Data Points
Supermicro is an underdog in the traditional server market, but it carved out a defensible niche with its dedicated AI servers. According to KeyBanc Capital Markets, Supermicro likely more than doubled its share of the AI server market from 10% in 2023 to 23% in 2024.
For fiscal 2025 (which ends this June), analysts expect Supermicro's revenue to rise 57% but its adjusted EPS to only grow 2% as it grapples with delayed customer purchases, declining gross margins, and the impact of the rising tariffs. But for fiscal 2026, they expect its revenue and adjusted EPS to rise 41% and 56%, respectively, as it overcomes most of those challenges. Those are high growth rates for a stock that trades at 14 times forward earnings.
Supermicro's valuations were also compressed by concerns regarding its delayed 10-K filing and potential regulatory probes over the past year. But as it resolves those issues and the AI market stabilizes, Supermicro could command a much higher valuation again.
3. The Trade Desk
The Trade Desk owns the world's largest independent demand-side platform (DSP) for digital ads, and it sells advertising space across desktop, mobile, and connected TV (CTV) platforms. It helps advertisers break free of the "walled gardens" at Alphabet's Google and Meta Platforms to sell more ads across the "open internet." A lot of its recent growth was driven by ad-supported streaming video services instead of desktop and mobile ads.
NASDAQ: TTD
Key Data Points
The Trade Desk might seem like an ad tech company instead of an AI one. But its ad placement platform Solimar, which was launched in 2021, uses AI algorithms to collect more first-party data for targeted ads, help advertisers set specific business objectives, and access clearer performance metrics. It's also rolling out a new Unified ID 2.0 (UID2) solution to replace traditional tracking cookies, and it's been building its own operating system (OS) for smart TVs -- called Ventura -- to host its own programmatic ad spots.
All of these irons in the fire should fuel The Trade Desk's growth and widen its moat against Google, Meta, and other diversified advertising giants. For 2025, analysts expect its revenue and adjusted EPS to increase 17% and 6%, respectively, even as the tariffs drive some companies to rein in their ad spending. Its stock isn't cheap at 50 times forward earnings, but it's still a great play on the growth of the automated, AI-powered advertising market.
