Artificial intelligence (AI) is rapidly changing the world we live in, making it a must-invest sector.
Let's look at 10 AI stocks to invest in right now.
1. Nvidia
The king of AI, Nvidia's (NVDA +2.59%) graphic processing units (GPUs) have become the backbone of AI infrastructure due to their fast processing speeds. However, it's the company's CUDA software platform that has helped create a wide moat for the company. CUDA lets developers easily program its chips, while it's also built a collection of tools and libraries to optimize its GPUs to run AI tasks. In Q1, the company had a whopping 92% market share in the GPU space. As AI infrastructure continues to ramp up, Nvidia is well-positioned to continue benefiting.
Image source: Getty Images.
2. Advanced Micro Devices
While a distant second to Nvidia in the GPU space, Advanced Micro Devices (AMD +3.50%) has become a leader in central processing units (CPUs), which act as the brains of the operation, within the data center. The company has also been able to carve out a niche for its GPUs with AI inference, which is less technically demanding than training AI models and where costs are a more important consideration. With inference eventually expected to become a much larger market than training, AMD has a big opportunity in front of it, even if it only takes some modest market share away from Nvidia.
3. Broadcom
Broadcom (AVGO +4.69%) has been seeing strong momentum with its networking portfolio, which is becoming more valuable as AI clusters grow in size and require more high-throughput, low-latency interconnects. However, its biggest opportunity lies in custom AI chips, where the company is starting to help customers develop their own custom chips to handle specific AI workloads. After successfully helping Alphabet (GOOGL 0.41%) (GOOG 0.20%) develop its Tensor Processing Unit (TPU), it's been adding more custom chip customers. It sees its three furthest-along customers as having between a $60 billion to $90 billion serviceable market in fiscal 2027, and that doesn't even include new customers like Apple. This is a huge opportunity for Broadcom.
NASDAQ: AVGO
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4. Taiwan Semiconductor Manufacturing
While the above three companies design advanced AI chips, Taiwan Semiconductor Manufacturing (TSM +1.40%) is the one they hire to actually make them. As such, it benefits no matter who becomes the biggest AI chip winner. TSMC's scale and technological expertise have set it apart in the foundry space, as rivals have struggled. This has led the company to become an invaluable cog in the semiconductor supply chain. With growing manufacturing capacity and strong pricing power, TSMC is very well positioned to benefit from growing AI chip demand.
5. ASML
While TSMC manufactures advanced chips, ASML (ASML +2.05%) is the company that makes the machines that make it possible to produce these chips. It has a virtual monopoly on extreme ultraviolet (EUV) lithography, which is the equipment used in advanced chip manufacturing. It also introduced its next-generation technology, high-NA (numerical aperture) EUV, that will allow for higher density chips. While TSMC has balked at the high price ($400 million) of these new machines, it cannot afford to get bypassed on the technological front by a competitor like Intel. As such, ASML should be a long-term winner as foundries continue to increase capacity and start looking toward even more advanced nodes (smaller, more powerful chips).
6. Amazon
While best known for its e-commerce business, Amazon (AMZN +2.02%) is also the largest cloud computing company in the world. In fact, Amazon Web Services (AWS) is its largest segment by profitability and its fastest growing, as it benefits from helping customers build their own AI models and apps and run them on its cloud infrastructure. The company is investing heavily in new data center infrastructure to keep up with AI demand. In addition, Amazon is using AI throughout its e-commerce operations to make its business more efficient and reduce costs. This combination bodes well for Amazon being a long-term AI winner.
NASDAQ: GOOGL
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7. Alphabet
Alphabet is also a cloud computing giant, where it is benefiting from many of the same trends as Amazon. As an added benefit, Google Cloud just hit an inflection point, with its profitability now beginning to soar. While there is some worry about the impact of AI on its core Google search business, the company is embracing the technology and doing what it does best: connecting consumers with merchants. Meanwhile, the advantages that Alphabet's strong distribution and entrenched ad network give it should not be underestimated.
8. Meta Platforms
Meta Platforms (META +0.22%) has been at the forefront of AI with its Llama large language model (LLM). The company is using AI to both keep users more engaged on its social media apps, as well as help advertisers create better campaigns and more precisely target potential customers. This is leading to more ad inventory and higher ad prices, since its ads are becoming more effective. In addition, the company has just started serving ads on its popular WhatsApp messaging app, and it is building out a new social media site, Threads. This should provide the company with a solid runway of growth ahead.
NASDAQ: PLTR
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9. Palantir
Instead of building out its own models, Palantir Technologies (PLTR 1.87%) has taken a different approach to AI, essentially looking to become the orchestration layer, or operating system, for the technology. It does this by gathering data from a wide array of sources and structuring it into an ontology that connects digital assets with their real-world counterparts. This then allows its customers to use its platform to solve complex, real-world problems through the use of AI. The platform can be used for numerous applications across industries, which means Palantir has a huge opportunity ahead.
10. Salesforce
After bringing the software-as-service (SaaS) model to the mainstream, Salesforce (CRM 3.45%) is now looking to become the leader in agentic AI, where AI agents will go out and perform tasks with little to no human interaction. The company is looking to help create a digital workforce by tightly integrating its Agentforce platform, Data Cloud solution, apps, and metadata framework. Together, it believes this will allow agents to better understand customer intent and perform tasks more effectively. As a consumption-based solution, AI agents are a huge opportunity for the company.
