Since ChatGPT burst onto the scene nearly three years ago, the stock market has been on an incredible bull run. AI stocks have led the way, with many reaching valuations forecasters wouldn't dream of in November of 2022. In fact, some stocks have climbed so far so fast ahead of huge expectations for revenue and earnings growth that there's an increasing crowd warning of an AI bubble.
But smart investors can still find great opportunities to invest in AI stocks that are poised to keep growing whether some air comes out of the AI trend or not. These three unstoppable companies look like great buys right now.
Image source: Getty Images.
1. Amazon
Amazon (AMZN 1.40%) is no stranger to bubble warnings. It was one of the biggest companies in the dot-com bubble, when it lost over 94% of its value from its peak in late 1999. It was also front and center during warnings of a cloud computing bubble in the early 2010s. That bubble never materialized, and cloud computing is now the driving force behind the growth of AI, and Amazon is a big beneficiary.
Management says AI services in its cloud computing business, Amazon Web Services, are a multibillion-dollar business growing at triple-digit rates year over year. Overall, AWS revenue grew 17% year over year last quarter. Some analysts have expressed concerns that Amazon's cloud business is growing slower than its main competition, but the company is operating off a much bigger base. On an absolute basis, Amazon appears to maintaining most of its market share.
NASDAQ: AMZN
Key Data Points
That said, the company is spending heavily to meet demand for AI services. Management expects capital expenditures to exceed $100 billion this year, mostly to support new data centers for AI. That has weighed on free cash flow, which fell to $18.2 billion in the trailing 12 months from $53 billion in the prior 12-month period.
Amazon's retail business is supporting the rapid expansion. Improvements to its logistics operations have helped cut costs, and combined with growing high-margin advertising revenue, Amazon's retail operations are more profitable than ever. Its North America operating margin climbed 190 basis points year over year to 7.5% last quarter, and International operating margin expanded 290 basis points to 3.4%.
With its P/E ratio near a 10-year low, Amazon stock still looks attractive.
2. EPAM Systems
EPAM Systems (EPAM 2.55%) is an IT services contractor focusing on platform and application engineering. The company has faced some significant headwinds over the last five years. With a workforce highly concentrated in Belarus, Russia, and Ukraine, ongoing political turmoil in the region has been tough to overcome. The company reorganized its workforce over the last few years and now has a widely distributed workforce across India, Central Asia, Latin America, and Eastern Europe. That restructuring provides the added benefit of allowing clients to collaborate with someone near the same time zone as them.
Another potential headwind is the rise of generative AI. When a product manager can simply vibe code a working application, it could lower the demand for the services EPAM provides. But AI also presents a huge opportunity for EPAM as businesses look to integrate new capabilities into their operations. "As our clients prioritize their AI readiness and preparatory actions, they are increasingly turning to us to build out their data and AI foundation," Chief Revenue Officer Balazs Fejes noted in the company's second-quarter earnings release.
NYSE: EPAM
Key Data Points
So far the efforts to provide a geographically diverse workforce while selling AI services have resulted in a strong turnaround. The second quarter marked the third straight quarter of sequential revenue growth with sales climbing 18% year over year. It now expects 13% to 15% growth for the full year.
That said, higher costs to pay software developers have eaten into its margins, resulting in lower net income. That trend should reverse, however, as EPAM moves into higher-end AI consulting services while also benefiting from AI-powered productivity gains for its software developers.
With the stock trading for just 12.5 times analysts' estimate for 2026 earnings, it's an absolute bargain, especially considering earnings per share should grow at a double-digit rate for several years after this year's reset.
3. ASML
ASML (ASML 1.82%) makes essential equipment for manufacturing advanced semiconductors. All those chips going into those massive data centers to train large language models are printed using ASML machines.
The company has seen strong demand for its new extreme ultraviolet (EUV) machines, offsetting a normalization of buying in China after a huge demand surge in the country during 2023 and 2024. Management gave investors excellent news alongside its third-quarter earnings: It expects 2026 sales to come in ahead of 2025 levels.
That's notable because the pressure in the Chinese market remains, and management had previously warned that it couldn't confirm continued sales growth for 2026. But strong results from Taiwan Semiconductor Manufacturing, the largest semiconductor foundry in the world, may have provided more confidence in the growth of the business, fueled by demand for AI chips.
NASDAQ: ASML
Key Data Points
Intel remains a big question mark, and if it fails to gain a major customer for its foundry services, it could end up closing up shop, resulting in a major loss for ASML. But recent developments, including investments from the U.S. government, investment funds, and other chipmakers, are encouraging signs.
The stock trades for around 34 times 2026 earnings expectations as of this writing. While that's expensive, ASML is well-positioned to benefit long-term from the growing demand for advanced semiconductors. After it recovers from the current headwind from China, it should be able to produce very strong earnings-per-share growth in 2027 and beyond.
