As 2024 draws to a close and a new year full of surprises approaches, there is no doubt that artificial intelligence (AI) will remain a top priority for investors in the coming year.
While Nvidia is widely considered to be the ultimate barometer of the health of the AI ecosystem, I think several other contenders could be top investment choices in 2025.
advanced micro device (NASDAQ: AMD),Amazon (NASDAQ:AMZN)tesla (NASDAQ:TSLA) As AI mania continues, it’s your chance to buy Hand Over Fist next year.
According to industry trends, Nvidia owns a whopping 88% share of the GPU market. On the surface, such a strong foothold might suggest that Nvidia simply has the best product on the market. Some customers claim that’s exactly the case, but there are more subtle reasons for Nvidia’s advantage. So the lack of competition over the past two years has essentially given Nvidia a first-mover advantage.
But over the past year or so, AMD has quietly emerged as a formidable contender in the data center GPU space, thanks in large part to its MI300 accelerator. MI300 has been such a bellwether for AMD that its data center services business is essentially growing at about the same pace as Nvidia’s business (which has slowed down over the past few quarters).
Next year, AMD will release a next-generation architecture called MI325X aimed at competing with Nvidia’s new Blackwell GPUs. Additionally, AMD’s GPU roadmap also includes a planned 2026 launch for the MI400 chipset, which will likely be the answer to Nvidia’s Rubin architecture, which is also planned for 2026.
I’m not implying that AMD is going to be a bigger company than Nvidia, but you have to give credit to the company’s pace of innovation. From this, it’s easy to see AMD slowly starting to take market share from Nvidia as AI infrastructure investment continues to boom.
AMD is currently a hot buy as investors seem to be overlooking the company’s progress, which is overshadowed by NVIDIA’s.
Image source: Getty Images.
The most lucrative opportunity among big tech stocks is Amazon. Amazon’s core business lies between e-commerce and cloud computing, but the company also has a subscription business (Prime), a streaming platform, and a fast-growing advertising division. Amazon is a unique company because its diverse model allows it to stitch together AI-powered capabilities across the company’s broader organization.
With holiday shopping trends, company budgets focused on AI, and new investments in streaming services, Amazon looks poised for an explosive fourth-quarter performance. In addition to that, the company has made some notable investments in AI infrastructure. Specifically, in the form of its own chips (Trainium and Inferentia) and through a lucrative partnership with OpenAI competitor Anthropic.
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Even with all these exciting and moving titles, Amazon’s revenue is only increasing by 11% annually. This may seem trite, but Amazon’s free cash flow is up over 120% year-over-year, giving the company plenty of cash to reinvest into its business. . This level of financial flexibility is unparalleled, and it’s only a matter of time before Amazon begins to show significant sales growth while continuing to generate profits.
For investors with a long-term view, Amazon is a no-brainer.
Tesla has struggled in recent years to match or exceed historic growth levels as a challenging macroeconomic environment prolongs demand for electric vehicles (EVs). .
But those days may be in the rearview mirror. Perhaps Tesla’s biggest near-term boost is its push into self-driving, known as fully self-driving (FSD) technology. FSD has made impressive advances in recent years, but there is reason to believe that 2025 could be the beginning of a generational growth story for Tesla’s ambitions in self-driving.
Dan Ives, an analyst at Wedbush Securities, said Elon Musk’s close relationship with President-elect Donald Trump could significantly accelerate the timeline for widespread commercialization of FSD. I think there is. Additionally, if President Trump decides to repeal or change regulations regarding the EV tax credit, Tesla could benefit from such action in the long run.
Tesla shares have soared since the election, with the stock hovering near all-time highs, but it remains an attractive opportunity for long-term investors. For now, I would be cautious about riding this momentum and look for more reasonable entry points if a selloff occurs. Nevertheless, 2025 will be a milestone year for Tesla thanks to the story surrounding FSD and the beginning of a new growth story for the company.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Adam Spatacco has held positions at Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
Here are my top three artificial intelligence (AI) stocks to buy in 2025. Hint: Nvidia is not on the list. Originally published by The Motley Fool
