6 Best Artificial Intelligence (AI) Stocks To Buy In 2025

Looking to secure huge growth potential with artificial intelligence stocks? The timeline may be short. While few expect AI spending to decline in the short term, stock prices often reflect a promising outlook long before expected profits materialize. With AI adoption poised to go mainstream in the coming year, now is the time to stake your claim.

Below is a brief overview of the state of AI, followed by a list of six AI stocks that look promising for 2025.

Understanding The State Of Artificial Intelligence In 2025

A McKinsey report characterizes 2023 as the year “the world discovered generative AI (gen AI).” 2024 is when businesses began realizing value from using gen AI. The rising adoption has sparked extreme demand for AI-capable computing power. Data centers, in turn, invested billions in hardware and software for powering, developing and training AI applications.

In 2025, companies like OpenAI will look to move AI’s capabilities into increasingly complex tasks. Use cases for AI will expand across industries and into the personal computing space. Organizations that have invested in AI will attempt to quantify the business value of those investments.

How those business value questions resolve will influence the S&P 500. Steven Wu, founding and managing partner of Carthage Capital Management, notes that nearly half of the S&P 500 is concentrated in tech stocks. “With AI expectations running high,” Wu explains, “it’s crucial for AI to continue meeting expectations or there may be severe consequences.”

Spending on AI infrastructure will likely continue, but the pace and focus of that spending may change. TechInsights predicts a greater emphasis on cost efficiency over performance. This will pressure the dominant hardware providers to evolve to meet those changing priorities.

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Methodology Used For These AI Stock Picks

To capitalize on the trends, I sought out the best artificial intelligence stocks with acceptable valuations, profitable business models, positive outlooks and healthy debt levels. These are the screening criteria:

1. Direct involvement with or exposure to AI technology
2. Price-to-earnings (PE) ratio below 55
3. Gross margin above 50%
4. EPS growth outlook for next year over 10%
5. Debt-to-equity (DE) ratio below 1

Only two stocks on this list have PE ratios above 40: Nvidia (NVDA) and Synopsys (SNPS). The higher valuation is an acceptable trade-off, given that these are also the only two stocks in the group with gross margins above 70%.

6 Top Artificial Intelligence (AI) Stocks To Buy In 2025

The table below introduces the six largest AI stocks that meet the five criteria noted.

Table data source: Stockanalysis.com.

Now, let’s explore each of these AI companies in more detail.

1. Nvidia (NVDA)

• Stock price: $134.01
• PE ratio: 52
• Gross margin: 75.9%
• TTM EPS: $2.54
• EPS growth outlook for next year: 48.9%
• DE ratio: 0.16

Nvidia Business Overview

Nvidia designs and sells high-performance semiconductors and related hardware and software. The company’s hardware is used in AI-capable data centers, gaming applications, robotics and automotive applications.

Why NVDA Is A Top Choice

For the last year, Nvidia has been showing the world what’s possible in terms of monetizing AI. Leveraging its reputation and the extreme demand for AI-capable chips, Nvidia has nearly tripled its enterprise value to become one of the few $3 trillion companies in the world.

Nvidia’s expertise and AI positioning are unrivaled. The question for investors is whether the growth opportunity is already built into NVDA’s share price. The company’s PE ratio is on the high side, but NVDA also has the highest EPS growth outlook and the second-highest gross margin among the stocks on this list. While the greatest gain potential for NVDA may have passed, the stock still has room to run.

2. Taiwan Semiconductor (TSM)

• Stock price: $200.58
• PE ratio: 32
• Gross margin: 54.5%
• TTM EPS: $6.24
• EPS growth outlook for next year: 29.5%
• D/E ratio: 0.26

Taiwan Semiconductor Business Overview

Taiwan Semiconductor makes semiconductors and related devices on contract for customers. The company has fabrication facilities in Taiwan, China, Japan and the U.S.

Why TSM Is A Top Choice

TSM is the world’s leading semiconductor foundry with an estimated market share of 61%, according to Statista. The closest competitor is Samsung, with 11% market share. TSM customers include leading chip designers that outsource manufacturing, such as Nvidia, AMD and Broadcom.

TSM has a long track record of performance and growth, built on technological expertise. The well-managed company is also critical to the AI infrastructure buildout. While Nvidia, Apple and AMD are designing the chips that will power the AI revolution, TSM is making them.

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3. ASML Holding N.V. (ASML)

• Stock price: $716.79
• PE ratio: 38
• Gross margin: 51.2%
• TTM EPS: $19.14
• EPS growth outlook for next year: 27.6%
• D/E ratio: 0.29

ASML Holding N.V. Business Overview

ASML Holding is a Dutch company that makes photolithography systems and related services. Photolithography uses light to transfer a pattern to another surface. The process is used with silicon wafers to make semiconductors.

Why ASML Is A Top Choice

ASML is the dominant market share leader in photolithography machines for semiconductors. The company has long-term relationships with major chip foundries, including Taiwan Semiconductor, Intel and Samsung. Those foundries cannot easily switch to another provider since a tooling change would require expensive downtime.

ASML stock hit a high point in July 2024 and then fell 35%. Investors got nervous when the company announced a conservative guidance for next year. The dip creates a nice buying opportunity for a company that will be essential to semiconductor manufacturing for the foreseeable future.

4. Synopsys (SNPS)

• Stock price: $504.13
• PE ratio: 54Gross margin: 81.4%
• TTM EPS: $9.25
• EPS growth outlook for next year: 15.8%
• D/E ratio: 0.08

Synopsys Business Overview

Synopsys makes electronic design automation (EDA) software that supports the design, manufacture and testing of integrated circuits. Customers span several verticals, including automotive and semiconductor design.

Why SNPS Is A Top Choice

Synopsys has been a high-performing stock for years. Morningstar quantifies its 15-year total return at 23.7%, which outperforms peers in the software infrastructure industry.

The track record of performance is comforting, but it looks even better alongside Synopsys’ current positioning. The company’s product suite will support the AI revolution directly by enabling ongoing innovation in integrated circuit design and manufacturing. Synopsys is also in the process of acquiring engineering simulation provider Ansys (ANSS). The merger will expand Synopsys’ market position and be accretive to revenue and earnings in 2025.

5. Teradyne (TER)

• Stock price: $123.42
• PE ratio: 39
• Gross margin: 57.9%
• TTM EPS: $3.15
• EPS growth outlook for next year: 34.4%
• D/E ratio: 0.03

Teradyne Business Overview

Teradyne makes automated test equipment for semiconductors, electronic systems and wireless devices. The company also offers robotics equipment and technology.

Why TER Is A Top Choice

Morningstar categorizes Teradyne as a wide-moat company, meaning it has a significant and enduring competitive advantage. The heart of that advantage is Teradyne’s expertise in testing high-performance semiconductors, which is largely unmatched by competitors.

The company’s testing solutions will be essential as semiconductors evolve to meet the performance and efficiency needs of more mature AI applications. In its third-quarter earnings release, Teradyne reported guidance-beating EPS—citing AI demand as a factor.

Teradyne also offers investors revenue diversification, strong margins and good financial discipline. Since 2020, the company has reduced its debt by more than $500 million.

6. Shutterstock (SSTK)

• Stock price: $31.90
• PE ratio: 31
• Gross margin: 58.4%
• TTM EPS: $1.02
• EPS growth outlook for next year: 13.0%
• D/E ratio: 0.58

Shutterstock Business Overview

Shutterstock licenses third-party graphics and images to corporations, broadcast companies, small and medium-sized businesses and individuals.

Why SSTK Is A Top Choice

Shutterstock recently completed the acquisition of competitor Envato. Envato expands Shutterstock’s offering with a subscription for unlimited downloads—formerly a gap in the SSTK’s product suite. The company is also seeing organic momentum, with improvements in content performance and growth in its Data, Distribution, and Services segment.

As of the third-quarter earnings release, Shutterstock’s data business had grown 40% year to date. This is how Shutterstock benefits from the AI buildout. The company currently has about two dozen deals licensing its content to train generative AI tools. As of August 2024, those deals were cumulatively worth $238 million.

Bottom Line

AI will be a driving force in the financial markets in 2025. Well-run, high-margin, adaptable businesses that support the development, training and deployment of AI applications are well-positioned for growth as the technology evolves.

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