Artificial Intelligence (AI) continues to show potential as a transformative technology shaping the modern world. It also represents one of the most promising investment opportunities in the long term, provided the right decisions are made. While not every AI-related stock will deliver life-changing returns, some have already demonstrated that potential. Here are three AI stocks worth considering for investment.
1. Nvidia
When evaluating AI stocks, Nvidia (NVDA -4.05%) is a top contender. The company has emerged as a major beneficiary of AI infrastructure spending, thanks to its graphic processing units (GPUs), which provide the computational power required for training AI models and running inference tasks. AI infrastructure spending is rapidly increasing, with tech giants like Microsoft, Amazon, Alphabet (GOOGL -2.65%) (GOOG -2.71%), and Meta Platforms committing billions to AI-related capital expenditures. Microsoft alone plans to spend $80 billion in 2025, while Amazon and Alphabet are investing $100 billion and $75 billion, respectively.
Nvidia holds a dominant position in the GPU market, with a 90% share due to its CUDA software platform and related microservices, which outperform competitors like Advanced Micro Devices. Despite its strong market position, Nvidia’s stock remains attractively valued, trading at a forward price-to-earnings (P/E) ratio of 25 times 2025 estimates and a price/earnings-to-growth (PEG) ratio of 0.5, indicating potential undervaluation.
2. Alphabet
Alphabet, through its Google Cloud division, is another key player in the AI space. Google Cloud has seen significant growth driven by rising AI demand, with Q4 revenue jumping 30% to $12 billion and operating income surging 142% to $2.1 billion. The company is addressing capacity constraints by increasing capital expenditures and leveraging both Nvidia GPUs and its custom tensor processing units (TPUs), developed with Broadcom. These TPUs help reduce costs and improve performance, enhancing Google Cloud’s operating margins.
Alphabet has also introduced Gemini 2.0, an advanced AI model integrated into search and AI Overviews, enabling more complex queries and tasks. Additionally, the company has developed innovative AI tools like Veo 2, a text-to-video generator that surpasses competitors like OpenAI’s Sora. Alphabet’s leadership in quantum computing and autonomous driving, through its Waymo unit, further solidifies its position as a tech innovator. The stock is reasonably priced, with a forward P/E ratio of 18.
3. Salesforce
Salesforce (CRM -2.71%), a leader in customer relationship management (CRM) software, is positioning itself at the forefront of agentic AI, the next evolution of AI. Unlike generative AI, which requires user prompts, agentic AI enables autonomous task execution with minimal supervision. For instance, while generative AI can suggest recipes, agentic AI can autonomously order ingredients.
Salesforce’s Agentforce platform offers pre-built AI agents for tasks like customer service, along with low-code and no-code tools for customization. Priced at $2 per conversation, Agentforce presents a scalable revenue model. Since its October launch, the platform has secured over 1,000 deals, with Salesforce projecting 1 billion AI agents deployed by January 2026. The stock is attractively valued, trading at a forward P/E of under 26 and a PEG below 0.6.
— news from The Motley Fool