Best AI stocks to watch in 2025

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1. Best AI stocks to watch
2. How to trade or invest in AI stocks
3. AI stocks summed up

Broadcom, Super Micro Computer, Nvidia, Arista Networks, Advanced Micro Devices and Palantir Technologies could constitute the six best AI stocks to watch in early 2025. These companies are selected as the top % shares included in the iShares Future AI and Tech ETF.

Artificial Intelligence (AI) could become the latest investing theme of choice — the tech world has seemingly had enough of disruptive tech, cryptocurrency, Web3, Blockchain, and the Metaverse — and is ready to set its hopes on the next big thing.

Of course, while these former concepts are on the backburner as the days of ultraloose monetary policy have ended, AI is becoming the driving force for big tech. Indeed, almost all of the S&P 500’s gains in 2024 have come from just seven companies, all of whom are potentially riding the AI wave to some degree.

There may be a difference between AI and the rest though. Artificial Intelligence is already in use across a wide variety of real-world applications, including in entertainment, social media, art, retail, security, sport analytics, manufacturing, self-driving cars, healthcare, and warehousing alongside dozens of other sectors.

Every Netflix recommendation, every supermarket rewards purchase, and every football match are analysed ever more relentlessly in order to provide more and better data. And while consumers have always understood — even peripherally — that AI was taking over more and more of the heavy lifting; the sector’s investment catalyst has finally arrived.

This catalyst is of course ChatGPT, the OpenAI-developed chatbot which garnered over 1 million users in just five days. It took Facebook 10 months, and Netflix three and a half years to hit the same milestone.

Taking the world by storm, it now boasts over 200 million active users a week, and investors are now considering whether the innovation could make entire careers in areas such as copywriting, accounting, personal training, and even software development entirely redundant.

Whisper it, but some even believe ChatGPT could be instrumental in taking on Google’s dominance in the internet search space.

If this sounds fanciful — and there’s been no shortage of fanciful tech-related claims in the recent past — consider both the pace of technological change over the past 50 years, the hundreds of once vibrant and now abandoned career paths, and the fact that Google itself usurped Yahoo’s search crown.

AI development is exceptionally expensive, and for every ChatGPT breakthrough, there are hundreds of costly failures. Therefore, the best AI stocks could be predominantly the larger blue chips — which also helps to diversify any investment in the event that their AI projects fail.

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Best AI stocks to watch

1. Broadcom Inc
2. Super Micro Computer
3. Nvidia
4. Arista Networks
5. Advanced Micro Devices
6. Palantir Technologies

1. Broadcom Inc (NASDAQ: AVGO)

Broadcom Inc is a global technology company who specialise in semiconductor solutions and infrastructure software. Its solutions help manage data and optimise operations in areas such as broadband, networking, wireless and enterprise software.

The company reported strong Q4 results which were largely driven by AI demand. Revenue reached $14.92 billion, up almost 25% from the previous year and its EBITDA reached $10.08 billion.

Looking ahead, analysts are expecting its strong performance to continue throughout the next year with revenue growing another 16.9% over the next 12 months. The stock is currently in a buy position.

2. Super Micro Computer (NASDAQ: SMCL)

Super Micro Computer provides storage systems, servers and other products for AI technology, data centers, edge computing and 5G. It also helps customers set up and maintain their systems. Its main product offering includes a range of servers, workstations and networking devices.

In Q2 of FY25, Super Micro Computer expects to see net sales increase by 54% year—on—year reaching $5.6 billion. Net income is also predicted to rise, reaching $353 million, up from $193 the year before and its gross margin is estimated to reach 11.9%.

The company’s direct—liquid cooling technology that provides an efficient way to help keep data centers cool is anticipated to be highly popular, with over 30% of new data centers expected to adopt it within the next year. As the demand for AI infrastructure continues to increase, the company revenues are expected to reach $25 billion by the end of FY25.

3. Nvidia (NASDAQ: NVDA)

Nvidia is well—known as one of the world’s most valuable chipmakers, used in electronics ranging from smartphones, to cars, to high—end computing. Its Q4 earnings were strong, reporting a 78% increase in sales which was primarily driven by its data center part of the business.

Although the launch of DeepSeek has caused concern that demand for its chips may be overstated, large tech companies such as Alphabet and Meta continue to invest heavily in Nvidia to help build both internal and user facing AI applications.

As AI becomes ever more mainstream, demand for these chips could surge, and importantly, there is a high barrier to entry — Nvidia has a wide economic moat surrounding its market position as the ‘bricks and mortar’ AI choice.

Our analysts have given the stock a buy rating.

Find out more about buying Nvidia stock.

4. Arista Networks Inc (NASDAQ: ANET)

Arista Networks offers data—driven networking solutions for campuses, cloud environments and data centers. Its product range includes analytics, advanced network software for automation, AI—driven routing and high-speed switches, which are all powered by its Extensible Operating System (EOS).

The company reported strong FY24 results with revenue increasing by just over $7 billion, up 20% year—on—year, and its net income was up almost 30%.

Throughout the past year, Arista Networks have introduced several new innovations to meet the growing demand for AI. These include its Etherlink AI platforms which enable faster AI connections and its EOS AI Agent which helps with AI networking thereby reducing job completion times.

For Q1 of 2025, the company expects to bring in between $1.93 to $1.97 billion in revenue and a gross margin of around 63%.

5. Advanced Micro Devices (NASDAQ: AMD)

Advanced Micro Devices is a semiconductor company which focuses on high performance computing and graphics visualisation, both of which are important in the advancement of AI technology. Its introduction of 3—D V— Cache technology in the AMD EPYC processors has improved how data is stored and increased performance up to 66%, helping to significantly advance AI workloads.

The company’s Q4 results saw revenue increase by 24% reaching $7.7 billion, which was mostly driven by its Data Centre and Client division. Operating profit was up 43% year—on—year to $2 billion.

Despite this, lower than expected guidance for Q1 of 2025 has negatively impacted investor sentiment.

AMD are one of the few companies with chips capable of powering AI technology. As AI continues to develop, there’s big opportunities as large tech companies such as Alphabet, Meta and Microsoft look to increase their AI budget.

Our analysts have given the stock a buy position.

6. Palantir Technologies (NASDAQ: PLTR)

Palantir Technologies is a software company which specialises in data analytics and AI. Its core product was first used by the US government as a counter terrorism tool, but it has since expanded its services to local governments and private corporations.

The company’s Q4 results for 2024 reported a revenue increase of 36% year—on—year reaching $828 million, with significant gains seen across both its commercial and government US businesses.

Whilst Palantir’s potential is significant and its recent results have reinforced it as a leader in AI-driven data analytics, its high valuation is a concern to some investors as it could result in short term volatility. It’s long—term success is dependent on the company consistently exceeding its profit expectations.

How to invest or trade in AI stocks with us

1. Find out more about AI stocks
2. Choose whether you want to trade or invest
3. Open an account with us or practise on a demo
4. Select your opportunity on our app or web platform
5. Place your trade or investment and monitor your position

You can either invest in shares directly, which typically involves holding shares over several years with the view that it’ll increase in value over time. Or you can take a shorter-term approach and trade.

With trading, you can benefit from leverage. This allows you to take a position that’s greater than your initial deposit. For example, with 5:1 leverage, you could open a £5,000 position while only depositing £1,000 as ‘margin’. A 10% market movement could result in a 50% gain or loss on your deposited margin.

Keep in mind, leverage means you can gain or lose money faster than expected. Because your position size is far greater than your deposit, you could lose more money than you put in. Be aware also that past performance is not an indicator of future returns.

Best AI stocks to watch summed up

These are just a selection of some of the top AI companies to invest in. Always do your own research. Past performance is not a guide to future returns.

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