Last year saw artificial intelligence (AI) stocks as the top performers, dominating the market. Nasdaq , the S&P 500 , and the Dow Jones Industrial Average for achieving double-digit increases. This can be attributed to investors' excitement about technology’s capability to drive transformative progress—ranging from streamlining various operations within businesses to aiding scientists in finding more effective medications at quicker rates. Such developments have the potential to significantly boost corporate revenue expansion and improve stock market outcomes.
Investors eager to capitalize early on this significant trend rushed into artificial intelligence stocks, with these companies often seeing returns of over 100% in 2024. The upward trajectory persisted into the New Year—until recently. Worries about economic conditions arose. President Donald Trump's tariffs Imports from Canada, China, and Mexico have negatively impacted the broader stock market, with growth stocks like those in artificial intelligence experiencing significant declines.
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However, the great news for those invested in artificial intelligence is that the core narrative remains intact. Businesses continue to pour billions into AI technology and infrastructures, with experts forecasting that the current $200 billion AI sector could surge to $1 trillion by the end of the decade. Additionally, due to recent drops in stock prices, this presents an ideal moment for investment at remarkably low entry points.
Let's take a look at two obvious stock picks to capitalize on the potentially trillion-dollar AI trend.
1. Nvidia
Nvidia (NASDAQ: NVDA) began with providing Graphics Processing Units (GPUs), which drive essential AI functions such as training and inference, to the AI sector; however, they did not limit themselves solely to this. This technology company has developed an extensive AI ecosystem, supplying clients with products ranging from networking solutions to software tools. Consequently, they can support these clients throughout every stage of their AI development process.
This has translated into soaring earnings For Nvidia, revenues have been increasing dramatically, doubling or even tripling. In the most recent fiscal year, revenue skyrocketed by 114%, reaching a historic peak of $130 billion. A significant highlight here is that despite these impressive figures, they maintain strong profit margins; their gross margin has remained above 70% consistently.
Nvidia caters to all prominent technology firms -- from Meta Platforms to Microsoft As these firms develop their AI infrastructures and platforms, they possess the financial resources to keep pouring investments into this area. Their strong ambition to succeed during the AI surge indicates they're likely to stay committed to using the top-tier solutions available. Nvidia not only produces the highest-performance chips currently on the market but also prioritizes continuous advancement through annual GPU updates. This approach implies that Nvidia’s leadership position in the industry should persist.
Ultimately, as stated, Nvidia’s development across various domains of AI indicates that it possesses the capabilities necessary to thrive at each phase of AI advancement — ranging from constructing the foundational infrastructure to implementing AI solutions for practical issues.
Currently, it trades at 24 times earnings estimates , having dropped significantly from as high as 50 just a few weeks ago, Nvidia is an essential buy for investors interested in artificial intelligence.
2. Amazon
You might consider e-commerce first when thinking about it. Amazon (NASDAQ: AMZN) . But along with being an e-commerce leader, the company also has become an AI giant. Amazon benefits from AI in two ways: by applying it to its e-commerce business to gain in efficiency and by selling AI products and services through its Amazon Web Services (AWS) unit.
Artificial intelligence has assisted in lowering the "cost to serve" in e-commerce businesses, such as by mapping out the quickest and most efficient paths for package deliveries. Additionally, you might know Rufus, Amazon’s AI-powered shopping companion, which enhances customer experiences, making it more likely they will return.
However, Amazon is really excelling with AWS. This division has recently hit an impressive annual revenue of $115 billion. run rate Thanks to its artificial intelligence offerings, Amazon provides all a customer might require throughout their AI journey—ranging from high-end Nvidia processors and cost-effective alternatives like Amazon’s proprietary chips, down to an entirely managed AI platform named Amazon Bedrock which facilitates the creation of generative AI apps. Furthermore, as AWS leads globally in cloud computing services, it gains easy entry into a vast pool of possible consumers.
Currently, Amazon’s stock is priced at around 31 times estimated earnings, which has dropped from over 45 towards the end of last year. Given the company's achievements in artificial intelligence and its strong market standing, it seems like an obvious choice for capitalizing on the trillion-dollar AI trend.
Don't let this second chance for a possibly profitable opportunity slip away.
Have you ever felt like you've missed out on purchasing the most profitable stocks? If so, you should definitely listen to this.
From time to time, our skilled group of analysts releases a “Double Down” stock Here's a suggestion for firms that seem poised for growth. Should you fear missing out on potential gains, this might be an ideal moment to purchase shares prior to their inevitable rise. The statistics clearly indicate what could happen.
- Nvidia: If you had invested $1,000 when we increased our stake in 2009, you’d have $282,016 !*
- Apple: If you had invested $1,000 when we increased our stake in 2008, you’d have $41,869 !*
- Netflix: If you had invested $1,000 when we increased our investment in 2004, you’d have $482,720 !*
Currently, we're sending out "Double Down" alerts for three remarkable firms, and such an opportunity might not come around again anytime soon.
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*Stock Advisor returns as of March 10, 2025
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy .
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