It’s been a great year like 2024 Artificial Intelligence (AI) stocks, it’s entirely possible that 2025 will be better. There is still a lot of momentum and a lot of positive catalysts on the horizon that could stimulate further growth. This is a market that most major players believe will be huge. Analysis from Statista puts the market at $826 billion by 2030.
So, as we approach the end of the year, which companies are expected to see serious growth? Although I don’t have a crystal ball, here are my top two picks.
Yes, Nvidia (Nasdaq: NVDA) He still has room to run. The semiconductor giant is gearing up for another big year driven mainly by sales of the soon-to-be-released “Blackwell” architecture, the latest version of its flagship AI-powered chips.
Much will be revealed in next month’s earnings and the guidance the company sets, but it looks like 2025 could see a big jump in revenue as demand continues to rise for existing “Hopper” chips despite Blackwell’s imminent release. . Blackwell’s 12-month backlog of warrant reports should keep that up. For example, Elon Musk recently purchased 100,000 H100 devices — there are more than one copy for each iteration of the chip architecture — and plans to buy another 50,000 H200 devices soon.
Nvidia’s competitors are struggling to keep up and I don’t see them eating materially into Nvidia’s market share in 2025. AMD The next-generation AI chip is scheduled to launch around the same time Blackwell finally ships. Here’s the rub: It will be a direct competitor to the H200, not the (Blackwell) B200. AMD is a full cycle late at this point. That amount will likely shrink, but Nvidia has plenty of money to drive a pace of innovation that AMD can’t match. Last quarter, despite trying to catch up, it spent about half as much as Nvidia Research and development.
Take a look at this chart, which shows the massive amount of free cash flow (FCF) Nvidia has to maintain its edge. Of course, money isn’t everything, but it sure helps.
dead (NASDAQ:META) It has received a lot of criticism in recent years due to Mark Zuckerberg’s insistence that transformation will be the next big thing. He doesn’t seem to be right about this — the company’s Metaverse division, Reality Labs, posted a $4.5 billion loss last quarter.
But I don’t think this is the foolishness that many do; It could still be a big metaverse. But the reason I brought this up is because it shows that Meta is not afraid to take risks and bet big. Zuckerberg applies the same attitude to AI, investing heavily in building his own Meta AI and eventually integrating this technology into the work Reality Labs does.
The truth is, whether Reality Labs comes to fruition or not, the company is still very profitable, seeing strong growth in users and revenue across its suite of social media platforms — the company makes its money by selling targeted ads on its platforms, something AI can To do it. Make more efficient. It’s also one of the cheapest stocks in big tech companies. From big players only alphabet He has less Price to Earnings Ratio (P/E). I think this makes Meta a very attractive choice, regardless of what happens with Reality Labs.
However, Meta has an opportunity to combine AI and the Metaverse, something that, if executed well, could be a game-changer for the company. To be clear, this is just speculation, but it’s possible that 2025 will see the company release a demo of something in this vein.
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Susan Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Johnny Rice He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Meta Platforms, and Nvidia. The Motley Fool has Disclosure policy.
The artificial intelligence (AI) market could reach $826 billion by 2030. Here are two companies that are considered AI stars. Originally published by The Motley Fool