Artificial intelligence (AI) has been the market-driving theme of the past year, and AI stocks have helped S&P 500the Nasdaqand Dow Jones Industrial Average each soared into double digits. Companies that sell artificial intelligence tools and services have seen earnings surge — and investors have piled into these players. The initial wave of artificial intelligence growth was about building infrastructure and training models to solve the complex problems of tomorrow.
Now, in the early days of 2025, there is reason to be optimistic about another great year for AI as the infrastructure build continues. Nvidia (NASDAQ: NVDA ) CEO Jensen Huang said about $1 trillion of computers worldwide need to be upgraded for accelerated computing, and that doesn’t happen overnight. On top of that, 2025 may be the year of the AI agent or AI agents that can think, develop a solution to a problem, and implement it. These and other real-world applications could be transformative for businesses and industries.
The great news is that you don’t have to invest a fortune in 2025 to potentially conquer this area of greatest growth. Here are the best AI stocks to invest around $500 in this year.
Nvidia has been the star of the AI market so far — and is well positioned to continue that success. The company is present at every stage of artificial intelligence development, from chips to power model training to software to apply artificial intelligence to the needs of businesses and organizations around the world.
As a result, Nvidia’s double- and triple-digit revenue growth probably has a lot more to go. To make the story even brighter, the AI leader is firmly committed to innovation, promising to update his graphics processing units (GPU) on an annual basis. This should make it very difficult for rivals to beat Nvidia – by the time they catch up, Nvidia is already launching a new product.
Speaking of new products, the company is currently in the midst of an important launch. Its Blackwell architecture has seen “incredible” demand, according to the company, and will generate billions of dollars in revenue in the first months of commercialization. So Nvidia stock could be headed for another big rally in 2025.
Alphabet (NASDAQ: GOOG ) (NASDAQ: GOOGL ) is the cheapest of the “Seven Magnificent” tech stocks that have fueled market gains of late. The stock trades for 21 times forward earnings, which is favorable given its long track record of earnings growth and solid future prospects.
You probably know Alphabet best through Google Search, the most used internet search platform worldwide. Google advertising accounts for billions of dollars in revenue for Alphabet every quarter.
But Alphabet is also building strength in AI, which is helping another source of revenue — Google Cloud — grow rapidly. Recently, Google Cloud crossed the $10 billion mark in quarterly revenue and $1 billion in quarterly operating income.
The service sells AI tools to users, backed by Gemini’s own Large Language Model (LLM). Alphabet also uses AI to make Google search even better and help advertisers reach the best audiences for their products. All of this could equate to a big win for Alphabet — and its investors — in the AI boom.
Amazon (NASDAQ: AMZN ), like Alphabet, uses AI in two ways. The e-commerce giant is a user of artificial intelligence to improve its business and sells artificial intelligence products and services through its cloud computing business, Amazon Web Services (AWS).
As you probably know, Amazon is an e-commerce giant — and the company’s investment in artificial intelligence could help the billion-dollar business generate even more profits over time. Amazon applies artificial intelligence tools to make its delivery process more efficient — for example, designing the best delivery route to save time and money.
AWS has already shown success in artificial intelligence, reaching an annual revenue rate of $110 last year. AWS focuses on every “layer” of artificial intelligence – from offering customers a wide range of chips to run their projects to a fully managed service that includes customizing LLMs. Amazon is also present in the app space and recently launched Project Amelia, an AI agent for sellers on its e-commerce platform.
Amazon will benefit from the next wave of AI growth, making it an ideal choice for 2025.
Have you ever felt like you missed out on buying the best performing stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation to companies that they think will fail soon. If you’re worried that you’ve already missed an investment opportunity, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1000 when we doubled in 2009 you would have $353,272!*
Apple: if you invested $1000 when we doubled in 2008. you would have $45,049!*
Netflix: if you invested $1000 when we doubled in 2004 you would have $457,459!*
Right now we are issuing “Double Dip” alerts for three amazing companies and there may not be another opportunity like this anytime soon.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, CEO of Alphabet, is a member of The Motley Fool’s board of directors. Adria Cimino has positions at Amazon. The Motley Fool has positions and recommends Alphabet, Amazon and Nvidia. The Motley Fool has a disclosure policy.
