The stock market is reaching record highs, and AI stocks companies are leading the charge. At the heart of this rally? Artificial intelligence (AI). Businesses are pouring billions into building the infrastructure, needed to support AI’s future—one that many believe will evolve into a multi-trillion-dollar industry.
But while excitement is running high, it’s important to stay grounded. Valuations still matter. Smart investors should be looking not just for hype—but for quality companies trading at reasonable prices. Here are three AI stocks that still offer room to grow.
1. Advanced Micro Devices (NASDAQ: AMD)
Taking the AI Chip Fight to Nvidia
Over the past few years, semiconductor chips have become the backbone of AI development. Powerful GPUs now fuel massive data centers that train and run large language models, generative tools, and autonomous systems. While Nvidia has been the clear leader, AMD is quietly gaining ground.
AMD’s Instinct MI300X chip is making headlines with bold claims of up to 40% more AI output per dollar compared to Nvidia’s equivalent. That kind of cost-efficiency could seriously shake up buying decisions among companies trying to justify billion-dollar AI infrastructure budgets.
AMD CEO Lisa Su recently shared that seven of the top 10 AI model builders are already using AMD’s Instinct chips. The company’s upcoming MI400 promises even more power—double the compute and 2.5x the bandwidth of its current lineup. These improvements could be a game changer.
Despite this momentum, AMD’s stock is still trading at a fraction of Nvidia’s valuation—with a price-to-sales ratio around 10, compared to Nvidia’s 30+. If AMD can grab even a modest share of Nvidia’s estimated 92% data center dominance, it could significantly reward long-term investors.
2. ASML (NASDAQ: ASML)
A Hidden AI Enabler with Long-Term Growth Potential
Behind every AI chip lies a deep supply chain—and ASML is a critical part of it. The Dutch tech company is the only manufacturer of extreme ultraviolet (EUV) lithography machines, the tools required to etch microscopic patterns onto silicon wafers. Without ASML’s machines, high-end chips simply wouldn’t exist.
Despite its vital role, ASML stock is down over 30% from its all-time high. The reason? Geopolitical concerns and export restrictions have created uncertainty, especially around future business in China.
But here’s what investors shouldn’t overlook: AI demand is long-term and global. Leading chip manufacturers already have multi-year roadmaps in place, and they’ll continue to rely on ASML’s cutting-edge tech regardless of short-term noise.
Even with these headwinds, analysts still project over 16% annual earnings growth for ASML. Its P/E ratio of 28 remains reasonable, especially considering its monopoly status and strategic importance to the AI supply chain. This could be a rare buying opportunity in a high-quality company.
Also Read – https://aiindexes.com/deepseek-r2-launch-delay/
3. Alphabet (NASDAQ: GOOG, GOOGL)
A Sleeper AI Giant with Undervalued Potential
Google’s parent company, Alphabet, has faced a mix of optimism and skepticism. On one hand, it’s the world’s leading search engine. On the other, regulators are circling with antitrust cases, and rising competitors like ChatGPT are drawing attention away from traditional search.
But look closer, and Alphabet’s performance tells a different story.
- Search revenue grew 12% year over year in Q2.
- Google Cloud—a major AI enabler—saw 32% growth.
- Its autonomous vehicle arm, Waymo, continues expanding across the U.S.
While headlines may focus on legal issues or competition, Alphabet continues to innovate, adapt, and grow. And despite its recent rally, the stock trades at a P/E under 22—a compelling valuation for a company expected to grow earnings nearly 15% annually.
Alphabet remains a diversified AI play, offering exposure to cloud infrastructure, search algorithms, autonomous vehicles, and cutting-edge research through DeepMind.
Key Takeaways for AI Investors in 2025
- AMD is offering competitive performance at a discounted valuation and could take a meaningful bite out of Nvidia’s dominance.
- ASML remains a critical part of the AI ecosystem, and the recent dip may be more about market noise than long-term fundamentals.
- Alphabet continues to thrive across multiple business lines, despite legal headwinds and rising competition in the AI chatbot space.
Also Read – https://aiindexes.com/google-ai-overviews/
