2 No-Brainer AI Stocks to Buy Right Now
Stocks across industries have suffered in recent times, amid concerns that President Trump's tariffs on imports would crush earnings and economic growth. But investors have been particularly worried about technology companies as many rely on producing their goods abroad. That means as they import these products into the U.S., they'll have to pay import duties, cutting into their profits.
In recent days, Trump put an exemption on electronics products, but this exemption may not be permanent. All of this means uncertainty remains. At the same time, though, it's important to keep in mind that tech players have successfully faced other headwinds in the past, and established players have what it takes to manage difficult times and win over the long term. On top of this, certain tech companies operate in the area of artificial intelligence (AI), which could offer significant growth in the years to come.
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With this in mind, and considering that valuations of many top players have declined, here are two no-brainer AI stocks to buy right now.
1. Advanced Micro Devices
You may immediately think of Nvidia when you think of AI chips, but rival Advanced Micro Devices (NASDAQ: AMD) is proving it can excel in this market too. AMD has been a leading player for years in the market for central processing units (CPU), the main processors in computers. And in recent times, it's put a focus on developing data center business, serving the AI market with both CPUs and graphics processing units.
Last year, its EPYC processor and AMD Instinct accelerator drove data center gains, helping the unit's annual revenue almost double. Data center revenue for the 12 months reached a record of more than $12 billion, and chief executive officer Lisa Su sees "clear opportunities for continued growth" thanks to the company's product lineup and overall AI market demand.
It's important to remember that, though Nvidia is the leader in the AI chip market, there's still plenty of room for a rival like AMD to be successful too. Customers aiming to apply AI to real world problems need an extraordinary amount of computing power for tasks like training and inferencing -- and they probably won't rely on just one provider to do the job.
Today, AMD shares are trading for 20 times forward earnings estimates, down from about 28 back in January. This represents a great entry point to a stock well-positioned to benefit from the ongoing AI boom.
2. Alphabet
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), like AMD, isn't the leader in a key AI market -- in this case, cloud computing. Its Google Cloud is in the third spot after Amazon 's Amazon Web Services and Microsoft 's Azure. But Google Cloud still is an enormous player delivering double-digit quarterly growth, and it's benefiting greatly from demand in the AI market. As in the AI hardware market, the cloud market also offers opportunities for more than one company to win.
In the recent quarter, Google Cloud revenue jumped 30% to $12 billion thanks to strong demand from AI customers. Growth is likely to continue as Alphabet expands Google Cloud's reach. For example, last year the company started work on 11 new cloud regions and data centers across the U.S. and internationally.
On top of this, Alphabet also generates billions of dollars in earnings from its Google Search platform -- and here it's steadily held onto the world's top position over time. Alphabet generates most of its revenue through Google as companies advertise there to reach us, their target audience. So this represents a steady source of growth for the company.
Alphabet hasn't been expensive over the past year, trading at about 24 times forward earnings estimates at its peak -- but today it looks exceptionally cheap at 17 times forward earnings. At this level, and considering Alphabet's prospects as AI growth continues, the company is a no-brainer buy right now.
Should you invest $1,000 in Advanced Micro Devices right now?
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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $518,599!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $640,429!*
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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