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Artificial intelligence (AI) is reshaping industries from health care to finance, and investors are increasingly investing in AI stocks as a way to capture that growth. AI stocks represent companies that are building or leveraging AI technology, including using cutting-edge algorithms, creating large language models or other generative AI, designing advanced chips, or applying AI to transform traditional business processes like manufacturing.
In this 2025 AI guide, we’ll spotlight some promising AI investment opportunities, helping you navigate a rapidly changing market, which can also be volatile and risky. To keep pace with new developments, this guide is updated quarterly, to help ensure you always have the latest insights at your fingertips.
Key Points
• AI stocks represent companies that develop or implement AI technology, e.g., large language models, designing advanced chips, or applying AI to transform business processes.
• Investing in AI stocks may capture growth in a rapidly changing market, though these stocks can be volatile and increase risk exposure.
• Top AI stocks by market cap, as of Q4 2025, include Nvidia, Microsoft, Alphabet, Amazon, Meta Platforms, and more.
• Investors can invest in AI stocks through direct stock purchases or by investing in AI-focused ETFs.
• Evaluating AI companies involves looking at fundamentals like revenue, growth, and debt, as well as risks such as volatility, competition, and regulatory issues.
What Are AI Stocks and Why Invest in Them?
The term “AI stocks” generally refers to stocks and companies that are investing in the AI space. This could be companies that are using generative AI, or companies that are building the infrastructure that helps support the growth of this sector.
There are many ways to seek returns while stock trading, but one of the most common is identifying successful and potentially profitable companies that are relatively undervalued.
One reason to invest in AI stocks is the same way that you might be investing in technology stocks in general. There is no denying that the demand for artificial intelligence has exploded over the past several years. Investing in the companies that are driving the AI boom may yield returns. But investors should also be prepared for some volatility in this space, owing to the rapid pace of innovation and steep competition.
It’s notable that in August of 2025, the Securities and Exchange Commission (SEC) announced the formation of a new AI-focused task force, to enable the regulatory body to enhance its own efficiency and ability to regulate markets increasingly inclusive of AI technology.[1]
Top AI Stocks by Market Cap (2025)
Here is a look at some of the top AI stocks by market capitalization, as of October 2025, along with 1-year returns.
| Company | Ticker | Market Cap | 1-Year Return |
|---|---|---|---|
| Nvidia | NVDA | $4.3 trillion | 55.50% |
| Microsoft | MSFT | $3.8 trillion | 18.02% |
| Alphabet (Google) | GOOGL | $3.1 trillion | 57.71% |
| Amazon | AMZN | $2.5 trillion | 24.03% |
| Meta Platforms | META | $1.96 trillion | 45.04% |
| Broadcom | AVGO | $1.6 trillion | 113.61% |
| Palantir Technologies | PLTR | $419.8 billion | 386.45% |
| AMD | AMD | $256.3 billion | 6.49% |
| ServiceNow | NOW | $197 billion | 6.44% |
| Snowflake | SNOW | $75.3 billion | 100.50% |
Source: Yahoo Finance, as of October 1, 2025.
Nvidia (NVDA)
• Overview: Data centers, driverless cars, and generative AI applications are all powered by Nvidia’s GPUs and AI accelerators. Many people consider these to be the foundation of the AI hardware ecosystem.
• Why it’s a top stock: The company has secured a dominant market position in training huge AI models due to the growing demand for its AI processors. It is positioned as a major facilitator of AI adoption in 2025 due to its robust revenue growth and alliances with cloud industry leaders.
• Risks: Due to its high value, Nvidia has little margin for mistake, and its market share may be eroded by growing competition from AMD, Intel, and hyperscalers producing custom chips.
Microsoft (MSFT)
• Overview: Microsoft is one of the largest companies in the world, and it’s now integrating AI into its Office, Azure, and GitHub Copilot software.
• Why it’s a top stock: Microsoft has partnered with OpenAI to make its Azure computing platform into a central hub for generative AI. It is considered an AI leader due to its size and scale.
• Risks: Microsoft has a history of attracting antitrust and regulatory scrutiny, which could affect returns. Owing to its size, it may be less nimble than competitors.
Alphabet (GOOGL)
• Overview: Alphabet is the parent of Google, one of the leading companies for search, cloud services, and AI research. Its DeepMind research lab is an industry leader.
• Why it’s a top stock: Google’s Gemini AI model is one of the more popular generative AI platforms. Due to its large data advantage and experience in AI, it has the potential to be a top AI stock.
• Risks: Alphabet has faced regulatory and antitrust action from governments. Also, the cost of remaining competitive (e.g., talent acquisition, operations) could exert downward pressure on the company’s bottom line.
AMD (AMD)
• Overview: AMD develops CPUs and GPUs used in gaming, PCs, and increasingly in AI data centers.
• Why it’s a top stock: Its MI300 chips are designed to compete with Nvidia for a slice of the artificial intelligence market. A track record of innovation also suggests AMD is well-placed for solid future performance. In addition, a Q4 deal to sell billions in GPUs to OpenAI has moved AMD into Nvidia’s space.[2]
• Risks: Nonetheless, Nvidia is an entrenched competitor in this market, making it risky to bet on AMD as the challenger in CPU and GPU development.
Broadcom (AVGO)
• Overview: Broadcom is a semiconductor and infrastructure software company providing chips used in networking, broadband, and AI data centers.
• Why it’s a top stock: Broadcom produces chips that support high-bandwidth connectivity, and its components are an essential part of industry infrastructure. Its strategic purchase of VMware provides additional income and profit. In addition, its Q3 revenue, and forecasts for the coming year, topped expectations.[3]
• Risks: Currently, Broadcom is considered overvalued, and there has been some top level insider selling that may indicate a lack of confidence.
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Palantir (PLTR)
• Overview: Palantir provides big data analytics platforms, widely used by governments and enterprises to manage and analyze data.
• Why it’s a top stock: Palantir focuses on using large language models for enterprise rather than those targeted to individual consumers. This allows for a profit base through government contracts and through working with large businesses.
• Risks: Palantir has an outsized reliance on government contracts, which exposes it to political and budgetary risks. It’s also one of the most expensive stocks in the S&P 500, as of October 8, 2025, and analysts are questioning its valuation.
Amazon (AMZN)
• Overview: In addition to dominating global e-commerce, Amazon also operates Amazon Web Services (AWS), a leader in cloud computing and AI infrastructure.
• Why it’s a top stock: AWS offers AI tools and chips, which make it a key platform for developers and enterprises deploying AI. Amazon has also innovated in using AI for areas like in logistics, retail, and Alexa.
• Risks: Because it is such a large company, it can be difficult to achieve the same percentage of growth as smaller companies.
Meta Platforms (META)
• Overview: Meta operates Facebook, Instagram, WhatsApp, and Reality Labs, using AI for content recommendations, ads, and virtual reality.
• Why it’s a top stock: It has open-sourced its Llama LLM model and is investing heavily in AI infrastructure. If it is able to continue its strong user growth and AI-driven monetization, it could pave the way for higher profits.
• Risks: Meta has invested a huge amount in both AI and the metaverse. This could bring down profits if it is not able to capitalize on its large investment.
ServiceNow (NOW)
• Overview: ServiceNow delivers cloud-based workflow automation solutions for enterprise operations, enhanced by AI. It’s also expanding into the CRM area.
• Why it’s a top stock: ServiceNow uses generative AI in its platform to help its customers be more productive. Most of its customers are on a subscription model, which provides a baseline amount of revenue.
• Risks: ServiceNow is considered one of the top providers in enterprise software solutions, but it’s dependent on IT budgets. Also, with part of its customer base in the federal government, the company could face headwinds there.
Snowflake (SNOW)
• Overview: Snowflake provides cloud-native data warehousing and analytics to allow companies to process massive datasets.
• Why it’s a top stock: Snowflake Data Cloud is increasingly using its AI model training and deployment to help drive enterprise adoption.
• Risks: The stock’s current valuation is relatively expensive relative to company earnings, which could signal that its upcoming growth may not match previous returns.
AI Stocks to Watch
In addition to the top AI stocks mentioned above, there are a few other potential up-and-coming companies to keep in mind.
• Astera Labs (ALAB) helps meet demand for high-speed connectivity in AI data centers.
• Arista Networks (ANET) has become a critical supplier of networking gear that keeps massive AI clusters running smoothly.
• SoundHound AI (SOUN) is carving out a niche in voice-driven AI.
Since these are smaller or emerging companies, they may offer returns but also come with increased risk and volatility.
How to Invest in AI Stocks
There are a couple of different ways that you might consider investing in AI stocks.
Direct Stock Purchases
One of the simplest ways to invest in AI stocks is to use a self-directed brokerage account to make direct stock purchases of companies that focus on artificial intelligence. This could include companies that make the GPU, XPU, and TPU chips that power AI data centers, as well as companies that are using generative AI to help grow their business, or other companies in the space.
Many companies that work with AI are public companies, which means that you can purchase shares of their stock with a brokerage account.
Recommended: Understanding ETFs
AI ETFs
An AI exchange-traded fund (ETF) focuses on investing in companies using artificial intelligence.
There are AI ETFs that are more general, investing in a combination of innovators and artificial intelligence providers, such as the Global X Artificial Intelligence & Technology ETF (AIQ).
There are also ETFs that take a more narrow focus, such as the Roundhill Generative AI & Technology ETF (CHAT), that focuses only on companies using generative AI.
Regularly putting money into an AI ETF can be a way to increase automated investing in your portfolio.
How to Evaluate AI Companies
If you’re interested in thematic investing such as investing primarily in AI companies, you’ll want to make sure that you can accurately evaluate these companies.
One way to evaluate a company is to look at its fundamentals. This includes its top-line revenue, growth prospects, profit margins, competitors in the space, and debt levels.
You might also compare its P/E ratio (calculated by dividing the current market price of its stock by its earnings per share (EPS) to the P/E ratios of similar companies. That can be an indicator as to whether the stock price is currently under- or over-valued.
Understanding a company’s fundamentals can help you assess its potential upside and risks, and whether it’s a good fit with your risk tolerance.
Recommended: Risk Tolerance Explained
Common Risks of Investing in AI Stocks
Some of the risks that come with investing in AI stocks are the same risks that come with investing in any stocks. One of the most common maxims in stock investing is that past results do not guarantee future performance. So even if you find an AI stock or ETF that has performed well, it may not be a good choice going forward.
Because many AI stocks are also emerging companies without a long track record, they may come with higher risks than some other companies.
One of the biggest risks of investing in AI stocks, though, is the rapidly evolving state of AI technology right now — with numerous competitors here and abroad, and an astounding pace of innovation.
Building an AI-Focused Portfolio
If you have done your research and decided that you want to build an AI-focused portfolio, you have a number of options to get started. By and large, the process of selecting AI stocks is similar to selecting any investment: It requires research and due diligence to find the right fit with your financial goals.
It may also be possible to choose a robo advisor that includes AI stocks. A robo advisor is a type of automated portfolio that can help investors select a portfolio that matches their goals and financial needs. These portfolios typically include a range of low-cost securities such as ETFs; it’s important to do your due diligence to verify the types of investments included.
Learn more: What Is a Robo-Advisor?
However you choose to proceed, you may also want to consult a financial professional, owing to the range of options and the potential risks involved.
The Takeaway
AI is being integrated into multiple facets of our society at a breakneck pace, with new companies and new products emerging every day. If you want to capture some of the potential growth that comes from this sector, consider dedicating a portion of your overall investment portfolio into AI stocks, bearing in mind the potential risk exposure.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
FAQ
What exactly are AI stocks?
The term “AI stocks” generally refers to stocks of companies that focus on areas like large language models (LLM), robotics, self-driving vehicles, or using AI to improve manufacturing processes. This means that there are many stocks that could be considered AI stocks, especially because AI technology is being integrated into many other sectors.
What are the main risks of investing in AI stocks?
The biggest risks of investing in AI stocks are that companies that focus on AI are often highly volatile, subject to competition and market disruptions. Unlike investing in AI ETFs, which include the stocks of many companies, investing in AI stocks ties your investment directly to the performance of a single company, which may increase risk exposure.
How can I identify the best AI companies for me to invest in?
There isn’t a single best AI company to invest in. Instead, the right AI companies to invest in will vary for every investor. That’s because each investor has a different risk tolerance and different things that are important to them. One way to identify AI companies to invest in is to look at the fundamentals of various AI companies, including revenue growth, profitability, and debt levels.
How much of my portfolio should be in AI stocks?
Deciding on your overall portfolio composition will depend on many individual factors, such as your risk tolerance and investment goals. AI stocks are generally thought to have a higher risk-reward ratio than other individual stocks, so you may want to keep the percentage of AI stocks in your portfolio low, unless you have a very high risk tolerance.
Should I buy individual AI stocks or an AI ETF?
Whether you should focus on AI stocks as compared to investing in an AI ETF depends on your overall investment goals and risk tolerance. You will generally have less volatility in an AI ETF, since your risk is spread out among many different stocks.
How do I stay updated on AI stock trends?
You can stay updated on AI stock trends in the same way that you might stay updated on trends for any company. You can follow news outlets, earnings releases, and industry reports. You can also follow analysts or set up alerts on companies you’re interested in through your brokerage app or another financial news service.
Recommended: How AI Investing Trends Are Shaping the Future
About the author
Dan Miller
Dan Miller is a freelance writer who has spent over ten years covering developments in the finance space. His expertise extends to all things personal finance, including student loans, budgeting, credit cards, and mortgages. Read full bio.
Article Sources
- U.S. Securities and Exchange Commission. SEC Creates Task Force to Tap Artificial Intelligence for Enhanced Innovation and Efficiency Across the Agency.
- CNBC. Tech AMD’s deal with OpenAI gives Nvidia much-needed challenger in market it dominates.
- Morningstar. After Earnings, Is Broadcom Stock a Buy, a Sell, or Fairly Valued?.
Photo credit: iStock/Liubomyr Vorona
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