Best AI stocks for traders in 2025

Discover the best AI shares on the stock market, which factors to consider, and how to trade them via CFDs.

By Capital.com Research Team10:33 (UTC), 8 April 2025

What are AI stocks?

AI stocks are shares in publicly traded companies that develop, integrate, or enable artificial intelligence technologies – ranging from tech giants like Microsoft (https://capital.com/en-au/markets/shares/microsoft-corp-share-priceMSFT) and Alphabet (GOOGL), which embed AI into their products and services, to GPU manufacturers like Nvidia (NVDA) and ‘pure play’ AI firms such as C3.ai (AI).

While AI has been around for decades, recent advancements in deep learning, generative AI, and edge AI have significantly accelerated its adoption across industries.

Whether it’s semiconductor manufacturers producing AI-optimised chips, cloud service providers expanding AI capabilities, or software firms building advanced AI applications, these stocks offer distinct opportunities and risks as AI continues to evolve.

What are the different types of AI companies?

AI companies vary significantly in their focus, technology, and market positioning. Some lead the industry with extensive AI-driven ecosystems, while others specialise in niche AI applications.

Tech giants integrating AI – these are established companies incorporating AI into their existing products and services. Microsoft, Alphabet, and Amazon are prime examples, using AI to enhance products and services, in addition to search algorithms, cloud computing, and automation.
AI hardware and semiconductor firms – companies like Nvidia and AMD develop the essential components powering AI applications, such as GPUs and specialised AI chips.
Pure-play AI software firms – companies like C3.ai and SoundHound AI specialise exclusively in AI applications and services, such as enterprise AI, automation, and machine learning tools.
AI-driven cybersecurity and automation firms – AI plays a growing role in cybersecurity and IT automation, with companies like CrowdStrike, SentinelOne and Palo Alto Networks leveraging AI for threat detection and defence.
AI data and analytics providers – firms such as Palantir and Snowflake focus on AI-powered data analysis, business intelligence, and cloud-based big data solutions.

Types of AI companies

How to find the top AI stocks

Traders seeking the top AI stocks in 2025 could observe a combination of technical indicators, market research, fundamental and technical analysis, and AIs role in different industries.

Here’s some factors to consider:

Revenue growth and AI-driven expansion

AI is becoming a major revenue driver for tech firms, with Nvidia (NVDA) surpassing $60.9 billion in revenue in 2024, influenced by rising demand for AI GPUs. Microsoft (MSFT) continues to expand its Azure AI services, largely due to its partnership with OpenAI. Meanwhile, Alphabet (GOOGL) is scaling up its AI business through Google Cloud and Gemini AI.

Review earnings reports, market capitalisation, and AI-related revenue breakdowns to help determine which companies are leading the AI race.

Market positioning and competition

While US tech giants dominate AI, competition is increasing, particularly from China. DeepSeek, a Chinese AI firm backed by major investors, has developed large-scale AI models that rival OpenAI's ChatGPT.

Meanwhile, Stargate – a $500 billion investment project launched in 2025 – aims to disrupt the AI landscape by reducing reliance on centralised cloud providers. If successful, Stargate’s approach could threaten the dominance of cloud-based AI providers like Microsoft, Google, and Amazon.

Monitor new AI entrants and disruptive innovations, as they could shift market dynamics.

AI infrastructure and R&D investment

AI leaders invest heavily in infrastructure and research to stay ahead. Nvidia is investing significantly in AI hardware, while AMD (AMD) is aggressively challenging Nvidia with its MI300X AI chips. Amazon (AMZN) is leveraging AWS Bedrock to provide businesses with scalable AI solutions.

Keep an eye on new AI hardware developments, cloud AI services, and funding announcements, as they may indicate which firms could lead the next phase of AI growth.

Stock price momentum and market sentiment

AI stocks were among the best performers in 2024, but volatility remains high. Nvidia and Microsoft saw strong stock rallies last year due to AI-driven revenue growth. However, pure-play AI companies like C3.ai (AI) experienced significant stock price swings due to inconsistent earnings.

Watch for institutional investments, earnings surprises, and read analyst notes to gauge when an AI stock might gain momentum.

Regulatory landscape and AI risks

AI regulation is evolving, particularly in the EU and US, where lawmakers are tightening oversight on AI-driven decision-making and data privacy. The EU AI Act is expected to impose strict compliance requirements on AI developers. Meanwhile, the US has introduced executive orders and proposed legislation to regulate AI, though enforcement is still developing.

Companies investing in AI safety, regulatory compliance, and ethical AI – such as Microsoft and Google – could have a long-term advantage, while firms heavily reliant on user data, like Meta (META), might face increased scrutiny.

The value and financial stability of AI stocks may change over time. Always conduct your own research and technical analysis alongside recent, reliable, qualified and vetted sources – such as independent analyses, SEC filings or company earnings reports.

Learn more about trading shares, including AI stocks, in our shares trading guide.

Top 10 AI stocks for 2025

Here are 10 of the top AI stocks to watch in 2025, based on their market positioning, revenue growth. Remember, while any of these stocks are capable of strong share price growth, they are also susceptible to bear runs and volatility. Past performance is not a reliable indicator of future results.

Best AI stocks in 2025

1. Baidu (BIDU)

Baidu is China’s leading AI company, with its Ernie AI model positioned as a major competitor to OpenAI’s ChatGPT. It is also making strides in autonomous driving with Apollo Go, its self-driving ride-hailing platform.

However, DeepSeek’s emergence has already influenced the competitive landscape in AI. DeepSeek claims its R1 model delivers similar performance at a fraction of the cost, which could disrupt Baidu’s AI monetisation strategy, particularly in consumer-facing AI services. Still, Baidu remains a key AI stock in 2025, as China ramps up AI innovation amid US chip restrictions.

2. Advanced Micro Devices (AMD)

AMD is taking the fight to Nvidia in the AI semiconductor market with its MI300X AI chips, designed for data centres and generative AI workloads.

Major cloud providers, including Microsoft and Meta, have already placed orders for AMD’s chips, positioning it as a strong alternative to Nvidia’s GPUs. With AI hardware demand surging, AMD’s stock could benefit from increasing adoption of its AI accelerators.

3. Microsoft (MSFT)

Microsoft is deeply embedded in the AI boom, from Azure AI and Copilot for Microsoft 365 to its multi-billion-dollar partnership with OpenAI.

Despite growing regulatory scrutiny over its OpenAI ties, Microsoft’s first-mover advantage in enterprise AI solutions makes it a top stock to watch in 2025. Its cloud-based AI services, including AI-powered cybersecurity and automation tools, have potential to influence revenue growth.

Learn more in our Microsoft trading guide and third-party price predictions.

4. Alphabet (GOOGL)

Alphabet has doubled down on AI with Google Gemini, its next-gen AI model, alongside AI-powered search and Google Cloud AI services.

Alphabet is also advancing Waymo’s self-driving technology, which is expanding its fleet of AI-powered autonomous taxis. Meanwhile, the company’s Tensor Processing Units (TPUs) aim to reduce reliance on Nvidia and strengthen its AI infrastructure.

Learn more in our Google (Alphabet) trading guide.

5. Nvidia (NVDA)

Nvidia remains the leader in AI semiconductors, supplying H100 and Blackwell GPUs to power AI data centres and generative AI applications.

However, competition is growing. AMD and Intel are ramping up their AI chip offerings, and China is developing domestic AI hardware to counter US restrictions. 2025 will reveal whether Nvidia can maintain its position in the AI race.

Learn more in our Nvidia trading guide.

6. Oracle (ORCL)

Oracle is emerging as a central player in AI cloud infrastructure, particularly through its participation in the Stargate initiative – a joint venture with OpenAI, SoftBank, and MGX – aiming to invest up to $500 billion in AI infrastructure in the United States.

Oracle has also secured key AI cloud contracts with Nvidia and AI startups, positioning it as a backend AI infrastructure provider. The company’s cloud growth, particularly in AI-driven enterprise solutions, makes it a key stock to watch.

7. Meta (META)

Meta is investing heavily in AI-powered ad personalisation, Llama AI models, and AI-generated content to enhance engagement across Facebook, Instagram, and WhatsApp.

With Apple’s privacy changes limiting ad-tracking, Meta is using AI to improve ad targeting efficiency. 2025 will be a key year to see if these investments translate into higher ad revenue and market share.

8. Taiwan Semiconductor (TSMC)

As the world’s largest semiconductor foundry, Taiwan Semiconductor is crucial to AI hardware production, supplying AI chips for Nvidia, AMD, and Apple.

With the AI boom driving record-high demand for 3nm and upcoming 2nm chips, Taiwan Semiconductor’s dominance in advanced chip manufacturing means it’s a top AI stock to monitor in 2025.

9. Amazon (AMZN)

Amazon’s AWS AI infrastructure powers AI applications across industries, with Bedrock and SageMaker enabling businesses to develop and deploy AI at scale.

Beyond cloud computing, Amazon is integrating AI into logistics, warehouse automation, and customer recommendations, improving efficiency across its e-commerce operations. AWS remains a cornerstone of AI adoption, making Amazon a top AI stock to watch.

10. Apple (APPL)

Apple is ramping up AI integration across its product ecosystem, with AI-enhanced Siri, AI-powered iOS and Mac hardware, and AI-driven photography and security features.

With its in-house AI chip development, Apple is reducing reliance on Nvidia and AMD while enhancing its AI capabilities. The company’s next-generation AI hardware could be a major driver for stock performance in 2025.

2025 AI stock trends to watch

The AI hardware race: Nvidia, AMD, and Intel are launching next-gen AI chips, with Nvidia’s Blackwell and AMD’s MI300X competing for data centre market share.
Stargate & decentralised AI: The Stargate Project is a $500 billion initiative by OpenAI, SoftBank, Oracle, and MGX to develop AI infrastructure in the United States, aiming to bolster domestic capabilities in artificial intelligence.
Generative AI monetisation: Microsoft, Alphabet, and Meta are under pressure to turn AI into profits, with models like ChatGPT, Gemini, and Llama driving innovation.
AI regulation & compliance: The EU AI Act and US oversight are tightening rules on AI bias, data privacy, and misinformation.
China vs. US AI race: US restrictions on AI chip exports to China are forcing Chinese firms to develop domestic AI alternatives.
The DeepSeek challenge: DeepSeek, a Chinese AI firm, has developed the R1 model, which matches or surpasses OpenAI's ChatGPT in performance while operating at a fraction of the cost and using less computing power.
AI-Powered cloud services: AWS, Azure, and Google Cloud are integrating AI at scale, with AI workloads driving cloud revenue growth in 2025.

Learn more about trading AI stocks

Read our comprehensive AI trading guide.

FAQs

What is an AI stock?

An AI stock is a publicly traded company where artificial intelligence plays a significant role in its business model, product offerings, or infrastructure. This includes tech giants like Microsoft (MSFT) and Alphabet (GOOGL), which integrate AI across their services, as well as semiconductor firms like Nvidia (NVDA), which produce AI-optimised hardware, and software-focused companies such as C3.ai (AI), specialising in ‘pure play’ AI solutions.

What are the top AI stocks to watch in 2025?

Top AI stocks to watch in 2025 include Baidu (BIDU), a leader in China's AI race with its Ernie AI model and autonomous driving initiatives; Advanced Micro Devices (AMD), which is challenging Nvidia with its MI300X AI chips; and Microsoft (MSFT), a major player in AI cloud services and OpenAI integration. Alphabet (GOOGL) aims to advance generative AI with Google Gemini and AI-powered cloud computing, while Nvidia (NVDA) remains dominant in AI semiconductors, supplying H100 and upcoming Blackwell GPUs.

Other key players include Oracle (ORCL), Meta (META), Taiwan Semiconductor (TSMC), Amazon (AMZN), and Apple (AAPL).

Is it worth investing, trading or buying AI shares?

The potential of AI stocks depends on whether one is investing for long-term growth or trading short-term price movements. Investors may seek exposure to AI’s long-term trajectory, driven by technological advancements and increasing enterprise adoption. Meanwhile, traders can capitalise on AI stock volatility, leveraging CFDs to speculate on price swings influenced by earnings reports, regulatory developments, and market sentiment.