3 Top Artificial Intelligence (AI) Stocks Ready for a Bull Run in 2025

The rapid growth in the use of artificial intelligence (AI) has created a complex landscape for investors. While many stocks in the AI space have become highly valued, presenting limited potential for further gains, there are still several key players positioned for substantial growth in 2025.

Throughout 2024, the surge in AI technology was evident as companies across various sectors scrambled to integrate advanced algorithms into their operations. Cloud service providers invested heavily in infrastructure upgrades, and semiconductor manufacturers worked diligently to develop specialized AI hardware.

This frenzy led to some investors making hasty investments in AI-related companies. While a few of these investments proved successful, others did not perform well, which left many shareholders at a loss. A secondary effect of this rush was that many AI stocks achieved high valuations, limiting room for future growth.

However, opportunities do exist among AI stocks that are well-positioned for future success. Below are three companies that are anticipated to be prime candidates for a bull run in 2025.

Advanced Micro Devices (AMD)

Despite Nvidia dominating the market for data center graphics processing units (GPUs), Advanced Micro Devices (AMD) has emerged as a strong competitor, developing attractive alternatives to Nvidia's high-priced chips. AMD has reported record demand for its AI-focused Instinct GPUs and Epyc CPUs. According to CEO Lisa Su, the company believes it has gained server CPU market share due to increased enterprise usage of its AI products.

In the third quarter, AMD's revenue reached $6.8 billion, up 18% from the previous year, with earnings per share (EPS) rising by 161% to $0.47. Particularly noteworthy is the massive increase in data center revenue, which soared by 122% to $3.5 billion, reflecting a growing appetite for its AI-focused chips. Although the gaming sector saw a significant decline, AMD's stock performance has been relatively low compared to Nvidia's impressive gains, presenting a unique opportunity for investors.

Analysts like Hans Mosesmann at Rosenblatt Securities have tagged AMD as a top stock for 2025, recommending a buy with a price target of $250, indicating a potential upside of over 100% from current levels.

Broadcom (AVGO)

Broadcom is a market leader in the tech sector, providing a diverse range of semiconductor and software solutions integral to numerous industries including broadband and data centers. The company claims that nearly all internet traffic is facilitated by its technology, and this positions Broadcom as a crucial player in the AI ecosystem.

The increasing demand for its products is reflected in Broadcom's financial results. In its fiscal fourth quarter, the company reported a 51% increase in revenue to $14 billion, with a 31% rise in adjusted EPS to $1.42. Looking ahead, management expects AI-related revenues to skyrocket, forecasting a growth range between $60 billion to $90 billion by fiscal 2027, a staggering increase from previous earnings.

Analysts have responded positively, raising price targets to around $300 per share, which represents an expected upside of approximately 31%. With its premium valuation at 36 times forward earnings, Broadcom's solid performance makes it a worthy investment.

Micron Technology (MU)

Another noteworthy company in the AI landscape is Micron Technology, a leading manufacturer of memory (DRAM) and storage (NAND) chips that are critical for AI data processing. Recently, Micron entered the competitive high-bandwidth memory sector with its innovative HBM3e chip, which has gained immediate traction.

Following an announcement from Nvidia that it would utilize Micron's HBM3e in its H200 Tensor Core GPUs, Micron experienced a surge in demand, selling out its entire production capacity for 2024. The company declared record revenue of $8.71 billion for its recent quarter, an 84% increase year-over-year, driven by massive growth in data center revenue, which jumped 400% and accounted for half of the total sales.

With a positive outlook and a price target of $250 from analysts like Hans Mosesmann, who believes we are witnessing one of the largest memory cycles in history, Micron remains a strong buy given its favorable valuation at 28 times earnings.

In summary, while many AI stocks face challenges due to inflated valuations, companies like AMD, Broadcom, and Micron stand out as potential winners for 2025, with promising growth trajectories and attractive investment opportunities.

AI, Stocks, Investment