The US stock market has achieved remarkable returns over the past five years S&P500 achieved double-digit profits in four of those years. While artificial intelligence (AI) and specialized semiconductor chips have driven much of this bull market, many leading technology companies are now commanding premium valuations that could give investors pause.
Consider the market leaders: Nvidiathe semiconductor giant driving the AI ​​revolution trades at a price-to-earnings (P/E) ratio of over 31, while Microsoftwhich leverages its OpenAI partnership to advance artificial general intelligence (AGI), has a price-to-earnings ratio of over 34. These valuations are significantly higher than the S&P 500’s price-to-earnings ratio of 24.1.
Image source: Getty Images.
These premium valuations have prompted savvy investors to look for growth opportunities elsewhere in the technology sector. Instead of paying big bucks for established AI giants, we’ve seen a wave of money flow into adjacent industries poised to benefit from AI adoption, including energy infrastructure, enterprise software, industrial automation, high-performance computing and robotics.
This strategic shift is not surprising. As AI technology becomes increasingly embedded in both hardware and software platforms, the standouts of 2025 are likely to emerge from small and medium-sized companies developing groundbreaking innovative applications of this technology. Here are two tech stocks positioned to benefit from the emergence of next-generation AI in 2025 and beyond.
IonQ(NYSE: IONQ) is at the forefront of quantum computing, a breakthrough technology that uses quantum mechanics to solve complex problems beyond the reach of today’s most powerful supercomputers. The quantum computing pioneer’s shares are up as much as 173% in 2024 (as of December 13) on mounting evidence that its ‘trap-ion’ approach could unlock the technology’s enormous commercial potential.
On this point, the quantum computing market is expected to reach $173 billion by 2040, according to McKinsey & Co. This exponential growth is expected to be driven by the ability of quantum computers to revolutionize areas such as drug discovery, financial modeling, cryptography, and perhaps most importantly, advanced AI.
While IonQ’s market capitalization of $7.32 billion reflects the high expectations of a company that is still scaling its revenue and developing its core technology, the sheer scale of quantum computing’s potential makes this a risk worth considering for patient investors. Indeed, the company’s recent series of partnerships with industry leaders and government agencies shows strong interest in the trapped-ion approach.
Looking ahead, quantum computing could create this unparalleled value by unlocking solutions to problems that have baffled scientists and engineers for decades. IonQ’s ‘trap-ion’ technology and robust cash position of $382.8 million suggest the company could emerge as a leader in this emerging field.
Serve robotics(NASDAQ:SERV) represents the practical application of AI in everyday life through its autonomous sidewalk robots. The company’s delivery systems use advanced AI algorithms for navigation, obstacle avoidance and route optimization capabilities that are becoming increasingly sophisticated as AI technology advances.
Recent developments highlight Serve’s momentum. The company raised $32.3 million in new capital in Q3 2024 and expanded its partnership Uber eats to deploy 2,000 robots by the end of 2025.
According to industry forecasts, the market for autonomous delivery robots will reach $450 billion by 2030. Serve’s ability to integrate increasingly sophisticated AI models into its robots could help the company capture a significant share of this fast-growing market.
With a market cap of $579 million, Serve trades at an attractive valuation given its technology leadership, expanding Uber partnership and vast market opportunity in autonomous delivery. The company’s strategic position in urban delivery automation indicates significant growth potential, especially as AI technology evolves and becomes an integral part of everyday life.
These two companies offer unique ways to invest in the growing capabilities of AI. IonQ’s quantum computing technology could dramatically speed up the way AI systems process information, while Serve Robotics shows how AI can revolutionize everyday services like food delivery. Both companies are still early in their growth trajectory, but target huge markets that could reward patient investors willing to accept short-term volatility.
Before you buy shares in IonQ, consider the following:
The Motley Fool stock advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.
Think about when Nvidia created this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $822,755!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates, and two new stock picks per month. TheStock Advisoris on duty more than quadrupled the return of the S&P 500 since 2002*.
View the 10 stocks »
*Stock Advisor returns December 9, 2024
George Budwell holds positions at IonQ, Microsoft, Nvidia and Serve Robotics. The Motley Fool holds positions in and recommends Microsoft, Nvidia, Serve Robotics, and Uber Technologies. 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.
2 Top Quantum Computing and Robotics Stocks That Could Rise in 2025 Originally published by The Motley Fool
