3 AI Stocks to Buy Hand Over Fist in January
Saturday, Jan 11, 2025 7:34 am ET
As we step into 2025, the artificial intelligence (AI) revolution continues to gain momentum, presenting exciting investment opportunities. With AI set to drive significant capital expenditures and generate substantial returns, investors should consider adding these three AI stocks to their portfolios. Let's dive into the reasons why these companies are poised for growth and why you should consider buying them now.
1. NVIDIA Corporation (NVDA)
NVIDIA is a leading player in the AI hardware market, providing the graphics processing units (GPUs) essential for AI processing. The company's GPUs are the gold standard for gaming, cloud computing, data centers, and machine learning, making it the go-to choice for AI processing. NVIDIA's relentless pace of innovation, with a one-year product-release cadence, ensures it stays ahead of the competition. The company's AI platform, which includes tools for developers to build AI agents, sets it apart from competitors by enabling customers to leverage AI in complex, multi-step tasks.

NVIDIA's market value surged by over $2 trillion in 2024, reaching $3.28 trillion, driven by the escalating demand for AI-centric chips. The company's strategic investments, totaling $1 billion in AI startups during 2024, underscore its commitment to advancing AI technologies. 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 for NVIDIA, citing its dominance in AI chip development and integration across various sectors.
1. Microsoft Corporation (MSFT)
Microsoft has solidified its position in the AI landscape through substantial investments and strategic partnerships. The company's collaboration with OpenAI and the integration of AI capabilities into its Azure cloud services have been pivotal in its AI strategy. In 2024, Microsoft's market valuation reached $3.1 trillion, reflecting its robust AI initiatives. As of January 2, 2025, Microsoft's stock price stands at $421.50, showing a modest decline of 0.83% from the previous close. With AI projected to drive significant capital expenditures exceeding $2 trillion over the next three years, Microsoft's comprehensive AI ecosystem positions it favorably for sustained growth.

Microsoft's AI strategy focuses on productivity-enhancing AI assistants, such as Copilot, which can generate as much as $100 billion in incremental revenue by 2027. The company's Azure Cloud is a significant beneficiary of AI adoption, with AI workloads driving 30% growth in its fiscal 2024. Microsoft is working to integrate AI into various aspects of its business, such as tracking return on investment (ROI) in AI spending and reducing the cost of adopting AI.
1. Amazon.com Inc. (AMZN)
Amazon has integrated AI into every aspect of its business, including its targeted advertisements, its marketplace search and recommendation algorithms, and Amazon Web Services (AWS). The company offers a wide range of AI and machine learning services to its AWS cloud customers, including advanced text analytics, automated code reviews, and chatbots. In December, Amazon announced a new family of multimodal generative AI models called Nova, which can generate images, text, and videos.
Amazon's AI initiatives have boosted AWS growth to the high-teens percentage range. The company's U.S. commercial segment, which includes AI Platform (AIP), grew 54% year over year and 13% sequentially, fueling a 73% increase in its remaining deal value. At the same time, the segment's customer count jumped 77%, demonstrating the strong demand for AI solutions.
In conclusion, NVIDIA, Microsoft, and Amazon are well-positioned to capitalize on the growing demand for AI technologies. Their strong fundamentals, innovative AI offerings, and attractive valuations make them compelling investment opportunities in the AI space. As the AI revolution continues to unfold, these three stocks are poised for significant growth in 2025 and beyond.