Just because an investment is obvious doesn’t mean it’s wrong. Here are three companies that are clear leaders in the artificial intelligence (AI) market, which could surpass $1.8 trillion by the end of the decade. According to Grand View Research, that’s an increase from the current $280 billion.
With so much AI-powered growth still to come, all three of these stocks are great buys right now.
No. 1 AI stock to buy: Nvidia
Smart investors have called it Nvidia (NASDAQ: NVDA) as one of the main beneficiaries of the AI gold rush, and they are right to be so. The semiconductor colossus designs state-of-the-art chips that enable the most advanced AI applications. In turn, Nvidia’s AI-related revenue and profits are growing like gangbusters.
Nvidia’s growth is breathtaking. Revenue rose 126% to $61 billion in fiscal 2024, which ended Jan. 28. That helped boost net profit by a whopping 286% to $32 billion.
The market for AI chips is expected to grow rapidly in the coming years. Tech leaders love Alphabet are investing aggressively to expand their cloud computing networks. At the same time, companies like it Tesla are buying massive amounts of Nvidia’s latest chips to power their AI initiatives. Demand for chips that accelerate AI workloads in data centers could increase nearly ninefold to $400 billion by 2027. Advanced micro devicesCEO Lisa Su.
With the new Blackwell processors set to deliver more powerful performance improvements, Nvidia’s innovative chip designs should remain the top choice for AI-focused buyers.
No. 2 AI Stocks to Buy: Taiwan Semiconductor
Chip designers like Nvidia and AMD rely on it Taiwanese semiconductor manufacturing (NYSE: TSM) to produce their designs. The global leader in semiconductor foundry services makes many of the critical electronic components that help power the AI revolution.
More than 500 companies asked TSMC to build almost 12,000 different products by 2023. Key end markets include smartphones, automotive technology and consumer electronics.
Still, it’s TSMC’s AI-driven capabilities that have investors most excited. The company’s net sales rose 60% year-on-year in April to 236 billion New Taiwan dollars, or about $7.3 billion, fueled by surging demand for AI-related semiconductor technologies. That marked a sharp acceleration from TSMC’s revenue growth of 34% in March and 11% in February.
Investors can expect these strong growth trends to continue. Wanting to guarantee access to TSMC’s cutting-edge technology, governments are offering the chipmaker billions of dollars in tax breaks to set up new factories within their borders. TSMC is therefore planning to open additional facilities in the US, Japan and Germany to expand its AI chip manufacturing empire.
No. 3 AI Stocks to Buy: Microsoft
A multi-billion dollar investment in the thrust of ChatGPT maker OpenAI Microsoft (NASDAQ: MSFT) at the forefront of the AI race. That’s an extremely valuable position, as evidenced by the tech giant’s $3 trillion market value.
Microsoft uses OpenAI technology to strengthen its own AI offering. Enterprises can access ChatGPT and other major language models through Microsoft’s Azure cloud computing platform. Revenue for Azure and the company’s other cloud services rose 31% in the quarter ended March 31, boosted by rising demand for AI tools.
Additionally, Microsoft is adding AI assistants called “copilots” to its popular productivity software. Users report significant productivity and efficiency gains, including more than an hour of time saved per week on work-related tasks.
Microsoft is just starting to make money from its AI copilots. Yet nearly 60% of the 500 largest companies in the US are already testing these promising AI tools. With Copilot subscriptions starting at $30 per month per user, the tech giant has the opportunity to increase its profits by selling these AI upgrades to the more than 400 million commercial users of its Office 365 software suite.
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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
3 No-Brainer Artificial Intelligence (AI) Stocks to Buy Now was originally published by The Motley Fool
