The market may have had a strong run over the past two months, but there are still plenty of stocks that look like great buys right now. The reality is that the artificial intelligence (AI) build-out is just getting started, and many of these companies have yet to recognize the full effect that an AI-first economy would have on their financials.
Three AI stocks that I wouldn't hesitate to buy more of are Nvidia (NVDA 1.86%), Meta Platforms (META +0.52%), and Amazon (AMZN 0.70%), as all three are well positioned to take advantage of the shift toward AI.
Image source: Getty Images.
Nvidia is the old guard in the AI world. It has been the go-to AI investment since the build-out began in 2023, and it has given investors zero reasons to doubt it. Nvidia is putting up incredible growth figures, with its latest growth rate coming in at 85% year over year and 20% quarter over quarter to $81.6 billion. To top things off, it expects $91 billion for Q2. Nvidia is showing its dominance, and its revenue growth rate continues to accelerate with rising AI demand.
Nvidia will remain a successful company as long as there is increased demand. That success is primed to continue because several AI hyperscalers have already indicated that 2027 will be a year of increased spending versus 2026's results. Nvidia believes that data center expenditures from the AI hyperscalers will surpass $1 trillion in 2027, which would be a huge growth opportunity for Nvidia.
Nvidia is far from done growing, and I think it's one of the best AI stocks to buy now.
Meta Platforms never gets the respect it deserves. Outside of Nvidia, it's one of the fastest-growing big tech companies, with its Q1 revenue rising 33% year over year thanks to the improvements its AI innovations are making on its advertising business. However, there are some skeptics surrounding some of Meta's other AI endeavors, so the stock gets priced at a dirt cheap level.
META PE Ratio (Forward) data by YCharts
At less than 19 times forward earnings, it's priced at one of the lowest points it has traded at over the past few years. At the time of this writing, it's even cheaper than the S&P 500, which trades for 22.2 times forward earnings. Considering the upside of the stock if one of Meta's AI technologies works out and how well it's doing right now, I think Meta is a strong value play and is primed to move higher once investors realize what a bargain this stock is.
Amazon may not be a traditional AI stock, but its heavy leverage to cloud computing makes it an AI play. During Q1, 59% of Amazon's operating profits came from its cloud computing business, Amazon Web Services (AWS). Cloud computing is a major beneficiary of increased AI spending, as most AI companies don't have the capital available to build their own data centers, so they rent capacity from a platform like AWS.
This is leading to strong growth, with AWS' revenue accelerating to 28% year over year, the best growth in nearly four years. Amazon is spending $200 billion on data center capital expenditures this year, which will result in major growth acceleration over the next few years as this capacity comes online. Amazon already has several clients secured for this capacity, so major growth is inevitable once it's online. This makes Amazon a great stock to hold onto while you wait for its investments to turn into cash flow-producing entities. I think that will make Amazon one of the best-performing stocks over the next five years, making it a strong buy now.
Keithen Drury has positions in Amazon, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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There are several great AI stocks worth buying right now.
3 AI Stocks I Wouldn't Hesitate to Buy Now – The Motley Fool
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