Investing a grand? Consider these 2 AI-focused stocks for potential significant gains in 2025.
In the ever-evolving world of tech, artificial intelligence (AI) continues to reign supreme, and 2025 promises an exciting chapter in its development. Two stocks that are poised to make the most of this trend are Nvidia (NVDA -1.10%) and Meta Platforms (META -2.31%). These two giants have dominated the market over the past two years, and I see no reasons why they won't continue their success story in 2025.
Let's dive into why each of these companies stands out:
Nvidia
Nvidia has been the go-to company for AI investments with good reason. Its graphics processing units (GPUs) and CUDA software, which support them, have become the industry standard. As a result, Nvidia earns a healthy slice of the billions being poured into AI infrastructure by major tech players.
According to Wall Street analysts, Nvidia's revenue may grow by 52% for its 2026 fiscal year, which ends in January 2026. That's a huge jump from where they expect FY 2025 revenue to end. The engine powering this growth is its next-generation Blackwell-architecture chips, which significantly outperform its Hopper chips in AI tasks like model training.
Some argue that Nvidia's stock is overpriced. While its forward earnings multiplier of 47 is high, it's justifiable considering Nvidia's rapid growth, which is likely to catch up with its higher earnings multiple in the years ahead.
Meta Platforms
Meta is no stranger to AI, investing heavily to keep its social media platforms relevant. Its ad sales on platforms such as Facebook, Instagram, WhatsApp, Messenger, and Threads form the backbone of its business.
In addition, Meta has also poured money into augmented reality (AR) and virtual reality (VR). While there's no guarantee these investments will pay off, they add to Meta's appeal as an attractive investment. The company is set to grow its revenue by 15% in 2025 – a slower rate than Nvidia, but with a more reasonable 24 times forward earnings multiplier.
Meta's revenue growth may not be as impressive as Nvidia's, but it offers a solid base business to help it weather the wait for AI to fully integrate into its operations.
Both Nvidia and Meta Platforms are well-positioned to capitalize on the enormous growth potential within the AI sector. They stand out due to their strong roots in AI, market dominance, and ambitious plans for the future.
In light of their strong roots in AI and market dominance, investors might consider allocating some of their finance into Nvidia and Meta Platforms for potential returns. With the increasing investment in AI infrastructure by major tech players, companies like Nvidia are expected to earn a substantial portion of these funds due to its industry-standard GPUs and CUDA software.
