Nvidia is still a top AI stock, as it has an estimated 85% to 90% share of the chip market.
Meta is highly profitable due to its ads business and is incorporating AI into many of its products and services.
10 stocks we like better than Nvidia ›
Artificial intelligence (AI) stocks have outperformed the stock market by a wide margin this year. The Morningstar Global Next Generation Artificial Intelligence Index, which provides exposure to about 50 top AI companies, is up 37% in 2025 (as of Sept. 19). The S&P 500 index has increased by 13% over that same time frame.
Because of how much growth there has already been in the AI sector, most of these stocks aren’t cheap. But that doesn’t mean you’re out of luck with investment opportunities. The global AI market is projected to grow at a compound annual rate of 29% through 2032, according to research by Fortune Business Insights.
So, which companies are best positioned to capitalize on that growth? Here is a pair of AI stocks worth considering for your portfolio.
Image source: Getty Images.
There are plenty of AI success stories out there, but none has been bigger than Nvidia (NASDAQ: NVDA). It’s the top company by market cap and the first to reach a value of $4 trillion.
Nvidia’s size and the fact that it’s trading at a high valuation (39 times forward earnings) scare off some investors. However, it has consistently delivered excellent results over the last two-plus years, beating earnings expectations and seeing revenue rise by more than 50% year over year for nine consecutive quarters.
Most of that is data center revenue as tech companies invest in Nvidia graphics processing units (GPUs) for the training and inference of their AI models. Nvidia is the dominant player here — estimates put its share of the AI chip market at 85% to 90%.
Nvidia is also taking steps to expand its reach. It recently invested $5 billion to take a roughly 5% stake in Intel. Intel is the leader in CPU market share, and data centers need AI GPUs and CPUs. Intel will now be making custom CPUs for Nvidia, allowing Nvidia to advance its technology.
On a negative note, China has reportedly banned its tech companies from using Nvidia AI chips due to tensions with the U.S. That effectively cuts Nvidia off from a major market. However, trade talks between the U.S. and China are ongoing, so it remains to be seen if this is a long-term issue.
Meta Platforms(NASDAQ: META), which owns Facebook, Instagram, and several other companies, is making a significant push into AI. So far this year, CEO Mark Zuckerberg has:
Hired away top AI talent from rival companies to form Meta Superintelligence Labs, with pay packages reportedly as high as $300 million.
Invested $14.8 billion to take a 49% stake in Scale AI, a data labeling start-up.
Committed to investing at least $600 billion in U.S. data centers and infrastructure through 2028.
Meta is incorporating AI through various aspects of its business. It launched a Meta AI assistant and has woven generative AI tools into its existing apps, including Messenger and WhatsApp. Meta Glasses are getting an upgrade to AI smart glasses. And it now offers AI advertising tools to enhance and optimize campaigns.
Advertising is also how Meta can afford to invest so heavily in AI. Its revenue over the trailing 12 months is $179 billion, with about 98% of that coming from advertising. Ad revenue gives Meta a sizable war chest — it has also generated $50 billion in free cash flow over the last 12 months.
It hasn’t all been smooth sailing for Meta lately. The tech giant’s Meta Ray-Ban Display glasses recently failed in two live demos, leading to an awkward moment for Zuckerberg and bad publicity for Meta’s AI ambitions. However, the glasses are getting positive early reviews.
Overall, this is a business with strong financials that’s betting big on AI to enhance its products and services. It’s also not overly expensive, trading at 28 times forward earnings. With its valuation, cash flow, and AI ambitions, Meta is one of the better tech investments currently available.
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Lyle Daly has positions in Nvidia. The Motley Fool has positions in and recommends Intel, Meta Platforms, and Nvidia. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.
What Are the 2 Top Artificial Intelligence (AI) Stocks to Buy Right Now? was originally published by The Motley Fool
