University of Kwazulu-Natal

Best Ai Stocks To Watch In August 2025 Investopedia

Bonisiwe Shabane
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best ai stocks to watch in august 2025 investopedia

These are the top AI stocks based on best value, fastest growth, and most momentum. July saw significant developments in artificial intelligence, highlighted by OpenAI’s launch of the ChatGPT agent, capable of independently executing complex, multi-step tasks such as web browsing, data analysis, and creating deliverables like slide decks. This advancement marks a move toward fully autonomous AI agents that could disrupt traditional white-collar work. On the regulatory front, China proposed a global AI cooperation framework aimed at regulating the rapidly evolving technology and fostering the sharing of technology between its allies, challenging U.S. dominance in the sector. These are the best AI stocks to watch for August 2025.

All data is current as of July 28, 2025. Value investing is about finding stocks trading below their true worth, with the expectation that the market will eventually correct the mispricing and the stock price will rise. Investors often use price-to-earnings (P/E) ratio to find stocks that are undervalued, as a lower P/E ratio can indicate that a company is valued at less than its fundamental value. However, it may take multiple quarters or years before a turnaround materializes. Some stocks may also remain cheap for a reason, falling into a "value trap," continuing to underperform despite appearing undervalued. Moreover, the P/E ratio should not be viewed in isolation.

Investors should ask why a stock is trading at a discount to its peers and whether that gap is likely to close due to a business recovery, or the market recognizing the value opportunity. Three companies. Three strategies. One AI megatrend investors can't afford to ignore. Artificial intelligence (AI) is one of the most transformative technologies of our time, driving unprecedented advancements in sectors ranging from healthcare and transportation to communications and beyond. For investors, this creates a landmark opportunity to back the companies at the forefront of this revolution.

As we head into August, three companies in particular stand out for their strategic positioning and potential for growth in the AI space. Nebius Group (NBIS +1.31%) is emerging as a serious contender in the AI infrastructure race. The Amsterdam-based company, led by former Yandex founder Arkady Volozh, reported staggering 385% year-over-year revenue growth in Q1 2025, reaching $55.3 million, driven primarily by demand for its AI infrastructure services. The stock has surged 92% year to date as investors begin to take notice. What sets Nebius apart is its vertically integrated approach. Rather than retrofitting general-purpose cloud infrastructure for AI workloads, Nebius builds custom hardware and software specifically for intensive AI training and inference.

Looking to secure huge growth potential with artificial intelligence stocks? The timeline may be short. While few expect AI spending to decline in the short term, stock prices often reflect a promising outlook long before expected profits materialize. With AI adoption poised to go mainstream in the coming year, now is the time to stake your claim. Below is a brief overview of the state of AI, followed by a list of six AI stocks that look promising for 2025. A McKinsey report characterizes 2023 as the year "the world discovered generative AI (gen AI)." 2024 is when businesses began realizing value from using gen AI.

The rising adoption has sparked extreme demand for AI-capable computing power. Data centers, in turn, invested billions in hardware and software for powering, developing and training AI applications. In 2025, companies like OpenAI will look to move AI's capabilities into increasingly complex tasks. Use cases for AI will expand across industries and into the personal computing space. Organizations that have invested in AI will attempt to quantify the business value of those investments. How those business value questions resolve will influence the S&P 500.

Stephen Wu, founding and managing partner of Carthage Capital Management, notes that nearly half of the S&P 500 is concentrated in tech stocks. "With AI expectations running high," Wu explains, "it's crucial for AI to continue meeting expectations or there may be severe consequences." AI and data infrastructure (Nvidia, Super Micro) Clean energy and utilities (GE Vernova, NRG Energy, GE) Cloud and data storage growth (Seagate, Western Digital) Defensive precious metals exposure (Newmont)

Premium consumer and aerospace demand (Tapestry, Howmet Aerospace) AI had deeply rooted itself in the narratives of the mainstream market. Companies of all industries increasingly are embracing AI into operations, generative chatbots, robotic logistics, predictive analytics, and capital markets are taking notice. Stock exchanges, asset managers, and capital allocators now look at Artificial Intelligence as a growth engine, and no longer as a niche phenomenon. Investors are gravitating toward portfolios to enhance exposure to companies with tangible AI traction, either through infrastructure or high-value use cases. Three overarching trends underpin AI’s market dominance.

First, enterprise spend on AI tools, from language models to automation engines, is soaring. Firms that integrate AI into CRM, cybersecurity, or trade systems often show measurable productivity gains. Second, demand for specialized hardware, particularly chips designed specifically for AI tasks, has created a boom in semiconductor investing. Third, institutional and regulatory recognition of AI’s economic role lends validation, policies now favor trustworthy, explainable, and auditable AI deployments. August 2025 brought into the limelight a few of the leading players: NVIDIA: considering that its GPUs and AI accelerators continue to drive data center and cloud deployments.

It’s hardware footprint is behind most of the AI infrastructure. Alphabet: DeepMind and Google Cloud AI offerings benefited from zeal of new shareholders. Its enterprise AI research platforms and APIs entrenched it further atop generative AI. Nvidia and AMD are dominating the AI chip market with record demand in 2025. Microsoft and Alphabet are expanding AI through cloud, software, and infrastructure. Intel is making a strong comeback with new AI chips and global manufacturing plans.

AI is among the world’s fastest-growing technologies. Businesses are pouring billions into AI tools, cloud services, chips, and data centers. It has caused a massive spike in the valuation of AI-related tech stocks. Some companies stand out owing to their solid technology, collaborative partnerships, and promising growth. These are the best AI stocks to buy that will do very well in 2025. Nvidia, AMD, Microsoft, Google, and Intel are top players that are completely revolutionizing the field.

Every one of these companies is a key player in the evolution of AI. Let’s look at how they are changing the market. Three major artificial intelligence stocks delivered strong second quarter 2025 earnings results that beat Wall Street expectations. ASML Holding, Alphabet, and Taiwan Semiconductor Manufacturing Company all reported revenue growth while trading at attractive valuations compared to their growth prospects. These AI infrastructure companies play crucial roles in the semiconductor supply chain and cloud computing services. Their Q2 2025 performance demonstrates continued strength in artificial intelligence demand across multiple sectors.

ASML Holding posted Q2 2025 earnings that exceeded analyst estimates for both revenue and profit margins. The Dutch semiconductor equipment manufacturer produces extreme ultraviolet lithography machines essential for manufacturing advanced AI chips. These EUV systems use concentrated ultraviolet light to create intricate patterns on silicon wafers. The company maintains a monopoly position as the world’s only producer of EUV lithography equipment. This unique market position makes ASML stock critical to global semiconductor manufacturing and AI chip production. Major foundries depend on ASML’s advanced equipment to produce cutting-edge processors.

Despite beating Q2 earnings expectations, ASML stock has declined nearly 40% from its 52-week high of $945.05. The semiconductor equipment stock currently trades at $690.75 with a market capitalization of $272 billion. This price decline occurred after management issued conservative 2026 guidance. Artificial intelligence continues to drive innovation and investment in the tech sector, with several companies standing out as promising opportunities. On August 10th, 2025, MarketBeat highlighted seven key AI-focused stocks worth monitoring due to their rapid growth and technological advancements. SoundHound AI (NASDAQ: SOUN) led the charge, with its stock price jumping to $13.55, fueled by an enormous trading volume of over 206 million shares.

The company specializes in voice AI solutions for industries such as automotive, TV, IoT, and customer service. Its suite of products includes the Houndify platform, SoundHound Chat AI, and Smart Answering solutions, all aimed at delivering seamless conversational experiences. Salesforce (NYSE: CRM) remains a dominant force in customer relationship management, integrating AI to enhance personalized customer support. With a market cap of $229.53 billion, Salesforce continues to innovate by using AI for sales forecasting, customer insights, and workflow automation. Despite a slight dip in trading on Friday to $240.09, its long-term growth outlook remains strong. Super Micro Computer (NASDAQ: SMCI) plays a crucial role in AI infrastructure, offering a range of server and storage solutions.

Its modular and open-architecture systems support AI data processing needs across sectors. The stock traded at $44.60 with a market cap of $26.62 billion. Despite recent fluctuations, the company’s strong fundamentals and AI relevance position it for future gains. ServiceNow (NYSE: NOW) offers an intelligent workflow automation platform that leverages artificial intelligence, machine learning, and robotic process automation. Its Now platform is used globally for digital transformation initiatives. The stock traded at $871.70 with a market cap of $181.31 billion and a high P/E ratio, reflecting investor confidence in its AI capabilities.

On Saturday, July 26, China expressed its intention to create an organization to foster global cooperation on artificial intelligence (AI). This could position China as an alternative to the US as both countries compete for influence over this important technology. At the annual World Artificial Intelligence Conference in Shanghai, Premier Li Qiang said China wants to help coordinate global efforts to regulate fast-changing AI technology. He also said China is ready to share its progress in AI with other countries, especially the “Global South.” The global south includes developing or lower-income countries, mostly in the southern hemisphere. On Wednesday, July 23, President Donald Trump’s administration released an AI plan designed to significantly grow AI exports to US allies. This is part of a strategy to keep the US ahead of China in AI technology.

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