Top 2 AI Stocks to Purchase by 2025
Investors looking to capitalize on the growth of artificial intelligence (AI) should consider two prominent tech stocks poised for significant gains by 2025. These companies are not only well-established but also strategically positioned to leverage their AI capabilities in the coming years.
Top 2 AI Stocks to Purchase by 2025
1. Advanced Micro Devices (AMD)
Advanced Micro Devices (AMD) has been making strides in the AI chip market. After navigating some years of slower growth, the company is now seeing a resurgence. In the third quarter, AMD reported a 36% year-over-year revenue increase, reaching $9.2 billion.
- Recent earnings per share rose by 30% year over year.
- Publications indicated a strong free cash flow, reflecting profitable business scaling.
- Market capital stands at approximately $332 billion.
The company’s innovative fifth-generation Epyc CPUs and the upcoming MI450 GPUs are noteworthy advancements. OpenAI has plans to purchase a substantial number of MI450s, highlighting AMD’s significance in the AI landscape. Analysts predict dramatic growth, with expectations of 66% annualized free cash flow growth through 2029.
2. Meta Platforms (META)
Meta Platforms (META) boasts an impressive daily user base exceeding 3.5 billion. The company is actively enhancing its services with AI, which has become an integral part of their advertising strategy. In the latest quarter, revenue surged by 26% year over year, underscoring the effectiveness of its AI-driven ad tools, which contribute over $60 billion annually to total revenue.
- Operating margin reached 43% on a trailing-12-month basis.
- Market capitalization is around $1.498 trillion.
- Stock price currently stands at $614.90.
Despite a recent decline in stock value, largely due to increased capital spending plans, Meta’s investments in AI infrastructure reinforce its long-term competitive edge. The stock’s valuation is attractive, trading at only 20 times the projected earnings for 2026, suggesting considerable upside potential.
Conclusion
Both Advanced Micro Devices and Meta Platforms are leading the charge in harnessing AI for future growth. Investors targeting the booming AI sector may find these stocks to be lucrative additions to their portfolios as 2025 approaches.
