Palantir Shows the AI Trade Is Alive and Well. 2 Stocks That Could Benefit

The artificial intelligence (AI) sector is poised for significant growth in 2025, with several companies leading the charge in innovation and market expansion. Investors seeking opportunities in this dynamic field should consider the following top AI stocks, each demonstrating strong potential for substantial returns.

NVIDIA Corporation (NVDA)
NVIDIA stands at the forefront of AI technology, particularly in the development of GPUs used for machine learning and AI applications. With its continuous investment in AI research and development, and its power over the GPU market, NVIDIA elevates itself to be one of the top AI stocks that will skyrocket in the year 2025. GPUs of NVIDIA are the main choice for machine learning, data processing, and deep learning work; thus, the company is a significant player in the AI ecosystem.

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.

Alphabet Inc. (GOOGL)
Alphabet, Google's parent company, has been a pioneer in AI through its subsidiaries like DeepMind and its extensive AI research initiatives. The company's AI advancements span various applications, including natural language processing and autonomous technologies. In 2024, Alphabet's market valuation reached approximately $2.3 trillion, underscoring its significant presence in the tech industry.

Meta Platforms Inc. (META)
Meta Platforms, formerly Facebook, has been integrating AI to enhance user experiences across its social media platforms and to develop new technologies for the metaverse. The company's AI initiatives aim to improve content recommendations, advertising efficiency, and virtual reality experiences.

Advanced Micro Devices Inc. (AMD)
AMD has emerged as a formidable competitor in the AI hardware market, developing advanced processors and GPUs tailored for AI workloads. The company's focus on high-performance computing solutions has enabled it to capture a growing share of the AI market.

Tesla Inc. (TSLA)
Tesla's integration of AI extends beyond autonomous driving to include manufacturing processes and energy solutions. The company's Full Self-Driving (FSD) technology relies heavily on AI to navigate complex driving scenarios.

International Business Machines Corporation (IBM)
IBM has been the pioneer in AI development with its Watson platform, which provides AI-driven solutions in sectors such as healthcare, finance, and customer service. IBM's long familiarity with AI and its dedication to the production of pioneering AI technologies put it in a solid position that cannot be overlooked for the potential rise of AI stocks that is projected for 2025.

Oracle Corporation (ORCL)
Oracle has been integrating AI into its cloud services and enterprise software solutions, aiming to enhance data management and business analytics capabilities. The company's AI-driven applications assist organizations in optimizing operations and decision-making processes.



The AI frenzy continues to rage on Wall Street, with investors pouring more than $5 billion into technology sector funds during the past 15 months. This trend was driven higher by three consecutive interest rate cuts, which have made AI stocks more attractive to investors seeking higher returns. The year 2024 has thus far proved to be a landmark for artificial intelligence (AI) stocks, propelled by the technology's rapid growth and accelerating adoption across myriad industries. From healthcare revolutionizing drug discovery and patient care to finance harnessing AI's predictive prowess to manufacturing and optimizing processes with machine learning, AI's disruptive influence cast a broad footprint. Per a Grand View Research report, the global artificial intelligence market size is projected to expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030. It is projected to reach $1,811.8 billion by 2030. Various companies are implementing AI-based solutions such as RPA (Robotic Process Automation) to enhance the process workflows to handle and automate repetitive tasks. AI-based solutions are also being coupled with IoT (Internet of Things) to provide robust results for various business processes. The AI in hardware market is poised for remarkable expansion, projected to swell from $20.88 billion in 2023 to $25.96 billion in 2024, exhibiting an impressive 24.3% CAGR. This trajectory is anticipated to persist, with the market forecast to reach $58.61 billion by 2028, maintaining a robust 22.6% CAGR. Key trends expected to shape this period encompass the accelerated pace of urbanization, further dissemination of internet connectivity, the continued evolution of smart city infrastructures, a rising appetite for self-driving vehicles, and an intensifying need for cloud-based computing capabilities. Generative AI and AI-related startups have attracted close to $50 billion in investments since 2023, affirming the growing interest in the technology and its applications. Microsoft MSFT invested close to $13 billion in OpenAI as it sought to gain a front seat in the startup's AI innovations. Anthropic is one of the startups that raised close to $2 billion from investors led by Google as it sought a valuation of close to $30 billion. Gartner estimates 240 million GenAI smartphones and 54.5 million AI PCs will be shipped worldwide by the end of 2024, representing 22% of all PCs and basic and premium smartphones, respectively. PC shipments are also expected to grow 3.5% in 2024, while smartphone shipments are expected to grow 4.2%. Amid the fervent AI boom, shareholders have been hunting for the pioneers and visionaries adept at monetizing AI's capabilities to deliver both ground-breaking innovation and substantial returns. Year-to-date Performance Image Source: Zacks Investment Research Our Top Picks Here, we have picked four tech stocks, NVIDIA NVDA, Twilio TWLO, Meta Platforms META and Zscaler ZS, which, apart from boasting strong fundamentals, have a favorable combination of a Growth Score of A or B and a Zacks Rank of #1 (Strong Buy) or #2 (Buy). Per Zacks’ proprietary methodology, stocks with such a perfect mix of elements offer solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here. NVIDIA is a leader in AI technology, particularly in the development of GPUs used for machine learning and AI applications. With its continuous innovations in AI hardware and software, NVIDIA stands poised to benefit from the growing demand for AI-driven solutions across various sectors, including gaming, data centers, autonomous vehicles, and more. Last week, NVIDIA forged a partnership with Indonesia's telco firm PT Indosat Ooredoo Hutchison to build an artificial intelligence (AI) center in Central Java in 2024. NVIDIA’s Blackwell platform promises to power a new era of computing by enabling organizations worldwide to build and deploy real-time generative AI models on an unprecedented scale. With a focus on efficiency, performance and scalability, Blackwell aims to address the evolving needs of industries ranging from data processing to generative AI. Manufactured using a custom-built 4NP TSMC process, Blackwell GPUs feature two-reticle limit GPU dies connected by a high-speed chip-to-chip link, enabling unprecedented computational power. Nvidia sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for NVDA’s 2024 earnings has moved north by 2.6% to $23.72 per share in the past 60 days, which suggests year-over-year growth of 83.02%. Twilio has enhanced its Flex platform with new features like Unified Profiles and Agent Copilot to improve customer support departments by boosting efficiency and productivity. Unified Profiles, powered by Twilio Segment, enables clients to access native data layers for personalized interactions. Agent Copilot uses this data, along with AI, to help employees automate tasks and work more efficiently. The new features will use AI to reduce costs associated with traditional engineering methods for merging and utilizing data. The company has been rapidly expanding in the AI space through partnerships and product launches. Amazon and Twilio collaborated to enhance the latter’s platform with predictive AI technologies. Twilio has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for TWLO’s 2024 earnings has moved north by 1.1% to $1.17 per share in the past 60 days, which suggests year-over-year growth of 10.71%. Meta Platforms, formerly Facebook, has been integrating AI to enhance user experiences across its social media platforms and to develop new technologies for the metaverse. The company's AI initiatives aim to improve content recommendations, advertising efficiency, and virtual reality experiences. Meta has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for META’s 2024 earnings has moved north by 1.2% to $11.24 per share in the past 60 days, which suggests year-over-year growth of 10.15%. Zscaler has been expanding its cloud security offerings, focusing on AI-driven solutions to protect against emerging threats. The company's AI