Winners tend to keep on winning. That's a core tenet of many of the best investors here at The Motley Fool -- and one that can help you achieve tremendous success in the stock market.
With this premise in mind, I propose that the best artificial intelligence (AI) stocks to buy in 2025 will be among those that were top performers of 2024. Here are two of the AI industry's biggest recent winners, which should continue to reward their shareholders in the coming years.
During the initial stages of the AI boom, investors primarily focused on the companies supplying the infrastructure needed to build and deploy AI models. While these hardware providers remain fertile ground for wealth-building investments, software will play an increasingly vital role in enabling businesses to harness the full power of AI. It's in this lucrative and rapidly expanding area that Palantir Technologies (PLTR 1.56%) holds a commanding position.
Palantir's best-in-class data science and machine learning technology enables its clients to quickly glean valuable insights from disparate sources of information. In this way, the data analytics leader helps its customers make better operational decisions, often in real time.
These benefits have not been lost on the U.S. military and its partners. In December, the U.S. Army awarded Palantir a contract valued at up to $619 million to bolster its AI-powered data platform and combat-readiness initiatives. That same month, the U.S. Special Operations Command chose Palantir to spearhead its efforts to integrate cutting-edge commercial technologies into its mission command system.
Businesses are also turning to Palantir for their AI needs. International mining titan Rio Tinto and British oil giant BP are using the analytics all-star's Artificial Intelligence Platform (AIP) to make their operations safer and more efficient, while power management leader Eaton is using AIP to strengthen its supply chain and resource planning tools.
The booming demand for Palantir's AI solutions can also be seen in its financial results. The company's third-quarter revenue leaped by 30% year over year to $726 million, fueled by a 39% jump in customers.
Moreover, Palantir is growing more profitable as it gains scale. The AI leader's adjusted operating margin checked in at an impressive 38%. That helped to drive Palantir's adjusted earnings higher by 43% to $0.10 per share.
Don't make the mistake of thinking Nvidia's (NVDA -3.67%) growth story is over. The dominant provider of AI infrastructure has made some shareholders rich -- a trend that's likely to continue in the decade ahead.
Nvidia designs the state-of-the-art semiconductors that power many of the leading AI applications. The major cloud computing platforms and other tech giants are scrambling to get their hands on as many of Nvidia's chips as they can. Microsoft, for one, plans to invest a whopping $80 billion in AI infrastructure in the year ahead. Meta Platforms, for another, expects to invest over $60 billion in its AI growth initiatives.
The Trump administration is another key proponent of American-led AI innovation, fueling optimism among investors. President Donald Trump recently announced The Stargate Project, under which OpenAI, Oracle, and Softbank pledged to invest a staggering $500 billion to build AI data centers in the United States over the next four years. As the dominant provider of the advanced chips that lie at the heart of AI data centers, Nvidia can expect much of this cash to flow into its coffers.
Yet fears of mounting competition have caused Nvidia's stock price to pull back sharply from its highs. Therein lies your opportunity.
News that Chinese start-up DeepSeek may have built an AI model on par with those offered by the likes of OpenAI and Anthropic for significantly less cost sparked concerns that companies would no longer need to spend as much on AI infrastructure. Those fears, however, are misplaced.
Even if DeepSeek's assertions are true, lower model-training costs should make AI more accessible to more people. That's likely to lead to more consumption of AI, not less, and by extension, more demand for Nvidia's offerings. For his part, Microsoft CEO Satya Nadella posted on X just after midnight Monday that he believes the use of AI is set to "skyrocket" as the technology advances and becomes more efficient.
Make no mistake: There's still a global race for AI supremacy underway, and the most powerful companies in the world all want to win it. Partnering with Nvidia gives them their best chance to succeed. That's likely to remain the case in 2025 and the years that follow.
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