The tech world is abuzz with the latest developments in artificial intelligence (AI), with companies pouring billions into bolstering their AI infrastructure. As a result, AI stocks are poised for a significant boost, with some analysts predicting a compound annual growth rate of about 35% for the AI market through 2030. Despite recent market volatility, AI stocks remain a silver lining in an otherwise stormy tech market. With companies like Alphabet and Meta announcing increased spending to support their AI programs, and the Trump administration pledging to help involved companies access the levels of electricity needed, the future of AI looks bright. Now is a great time to get in on promising long-term players, with many AI stocks trading at bargain levels. In this news brief, we'll take a closer look at the latest AI stocks to watch, including ASML Holding, Twilio, Alphabet, Apple, and Keysight Technologies.
ASML Holding
ASML Holding is a leading manufacturer of chipmaking equipment, playing a central role in the proliferation of AI. The company's EUV lithography machines are in high demand, with 42% of its bookings last quarter being for these machines. ASML's net bookings jumped by 170% sequentially in the fourth quarter of 2024 to 7.1 billion euros, with the company expecting to achieve the higher end of its 2025 revenue guidance of 30 billion euros to 35 billion euros. Analysts expect ASML's earnings growth to pick up the pace from 2025, with the company poised to sustain such impressive growth for a much longer time as the demand for AI chips is likely to increase.
Twilio
Twilio is a leading player in the cloud-based contact center market, with its AI-focused tools gaining traction among clients. The company reported 7% revenue growth in 2024 to $4.5 billion, with its top line jumping at a more impressive pace of 11% in the final quarter of the year. Twilio's improved growth can be attributed to the growing demand for its AI-focused tools, with management pointing out that 90% of the Forbes 50 AI start-ups are building applications using Twilio's solutions.
Alphabet
Alphabet has made a significant bet on AI with its acquisition of Wiz for about $32 billion. The deal is aimed at strengthening Alphabet's position in the cloud-computing race against Amazon.com and Microsoft. The acquisition will enable Google with fast-growing cybersecurity solutions that companies use to remove critical risks. Alphabet expects the deal to close in 2026, subject to regulatory approvals.
Apple
Apple is poised for an AI boom without heavy GPU investments, according to Evercore. The company's stock has been reiterated as 'Outperform' and raised its price target on the stock to $275 per share from $260. Apple is positioned to remain a 'tech staple' and obtain the benefits of the artificial intelligence boom, with the potential to boost gross margins through product mix, pricing strategies, as well as the impact of stock buybacks.
Keysight Technologies
Keysight Technologies has introduced AI insight, an upgrade of its Vision Network Packet Brokers designed to enhance AI-driven cybersecurity activities such as threat detection. The innovation is aimed at helping enterprise IT and security operations teams expedite threat identification while ensuring they maintain operational efficiency and compliance.
Key Takeaways
- AI stocks are poised for a significant boost, with some analysts predicting a compound annual growth rate of about 35% for the AI market through 2030.
- Despite recent market volatility, AI stocks remain a silver lining in an otherwise stormy tech market.
- Companies like Alphabet and Meta are announcing increased spending to support their AI programs, and the Trump administration is pledging to help involved companies access the levels of electricity needed.
- Now is a great time to get in on promising long-term players, with many AI stocks trading at bargain levels.
Sources
- 2 Artificial Intelligence (AI) Stocks That Could Go Parabolic
- Alphabet (GOOGL) Makes $32B AI-Powered Cybersecurity Bet with Wiz Acquisition
- Apple (AAPL) Poised for AI Boom Without Heavy GPU Investments, Says Evercore
- Keysight (KEYS) Boosts Cybersecurity with AI Insight for Threat Detection
- AI Stocks: The Silver Lining in an Otherwise Stormy Tech Market