AI Stocks to Watch: NVIDIA, AMD, and Palantir

As artificial intelligence (AI) continues to revolutionize various industries, investors are keeping a close eye on AI stocks that have the potential to soar in 2025. According to a Wall Street analyst, NVIDIA Corporation (NVDA), Advanced Micro Devices (AMD), and Palantir Technologies (PLTR) are three AI stocks to watch as they could reach a combined market capitalization of $4 trillion in the coming year. Let's delve into the reasons behind this bullish outlook and explore the growth opportunities for these AI stocks.



1. NVIDIA Corporation (NVDA):
NVIDIA is a leading provider of graphics processing units (GPUs) and AI platforms, with a strong presence in the data center, gaming, and professional visualization markets. The company's strategic investments in AI startups, totaling $1 billion in 2024, demonstrate its commitment to advancing AI technologies and maintaining its competitive edge. NVIDIA's market value surged by over $2 trillion in 2024, reaching $3.28 trillion, driven by the escalating demand for AI-centric chips. As of January 2, 2025, NVIDIA's stock price is $134.29, reflecting a slight decrease of 2.09% from the previous close. However, analysts project continued growth in the company's AI business, with a forward P/E ratio of 32.605263, indicating strong investor confidence in NVIDIA's AI strategy.



2. Advanced Micro Devices (AMD):
AMD is a leading semiconductor company that offers a diverse range of products, including x86 microprocessors, graphics processing units (GPUs), embedded processors, and semi-custom system-on-chip (SoC) products. The company's products cater to various markets, such as data center, client, gaming, and embedded segments, providing a broad customer base and reducing reliance on a single market. AMD's strong financial performance is evident in its market capitalization, which reached $195.76 billion as of January 2, 2025. Rogue Funds, an investment management company, sold its AMD puts for a solid profit, indicating the stock's potential for growth. AMD's AI offerings include data center graphics under the Radeon Instinct and Radeon PRO V-series brands, as well as server microprocessors under the AMD EPYC brands. These products are designed to support AI workloads, but they are not the company's sole focus, unlike NVIDIA and Palantir, which have more specialized product offerings.



3. Palantir Technologies (PLTR):
Palantir is considered the purest AI player in the software industry, focusing solely on AI-driven data analysis. Its products, Gotham and Foundry, are built around AI and handle complex, unstructured data from various sources. This focus sets it apart from competitors like NVIDIA and AMD, which offer a broader range of products, including GPUs and CPUs. Palantir's commercial business has seen impressive revenue growth, with commercial revenue accelerating by 54% year-over-year and 13% quarter-over-quarter in Q3 2024. The company's pristine execution of a clear winning strategy, where it enters businesses, secures deals, and streamlines expenses, contributes to its projected growth. Palantir's stock price closed at $12.50 per share on January 2, 2025, with a market capitalization of $12.50 billion. The company's strong financial performance and growth prospects make it an attractive investment opportunity in the AI space.



In conclusion, NVIDIA, AMD, and Palantir are three AI stocks to watch in 2025, as they have the potential to reach a combined market capitalization of $4 trillion. Their competitive advantages, strong financial performance, and growth prospects make them attractive investment opportunities in the AI space. As AI continues to revolutionize various industries, these AI stocks are well-positioned to capitalize on the growing demand for AI technologies and infrastructure. However, investors should always conduct their due diligence and consider the potential risks and challenges associated with these AI stocks before making any investment decisions.