Artificial intelligence has been around in one form or another since the early 1950s. But it wasn’t until the release of ChatGPT in late 2022 that the technology (and Wall Street’s interest) really kicked into high gear.
A Goldman Sachs executive said ChatGPT is “one of the biggest disruptions I’ve ever seen,” comparing it to “the internet, apps, the cloud – it’s that order of magnitude.”
To put this popularity in perspective: Following its launch in November 2022, over 1 million people downloaded ChatGPT in five days, and over 100 million people signed up for it in two months. This set an all-time record for the fastest rate of consumer technological adoption at the time.
In comparison, it took Facebook more than 4.5 years to reach 100 million users, and Google required over a year to get there.
Since late 2022, AI has grown by leaps and bounds.
For example…
- The aviation industry uses AI in airport screening X-ray machines, baggage check-in, factory space and fuel optimization and even to help improve airport landing capacity in times of low visibility.
- In finance, AI is heavily used in algorithmic trading, which requires lightning-fast decision-making that human minds are simply too slow to process.
- AI is used in robots operating in heavy industry…
- In medicine, AI is spotting hard-to-identify diseases and lifesaving drugs
- In healthcare, doctors are using AI to assist with complicated surgeries and help diagnose cancer. They’re harnessing data collected from smartphones, watches, virtual assistants, computers, tablets, and so on and using machine learning to look for patterns to determine early-onset dementia and Alzheimer’s disease.
It’s used in human resources, marketing, media, telecommunication maintenance, transportation and much, much more.
Clearly, the global AI market is rapidly expanding.
In 2023, Grand View Research estimated the global AI market was worth about $281.4 billion. But by 2030, they project it will be worth north of $1.8 trillion!
The Next Wave of AI in 2025
Companies are scrambling to incorporate AI into their business. They see the writing on the wall.
The reality is that AI is unlike anything we’ve ever seen. As a result, it’s being adopted at an unprecedented scale.
Major tech revolutions don’t truly take off until they’re widely accessible. We saw this happen with the internet, which only tech enthusiasts and the military used – until 1995 when the Netscape browser came along, making it a whole lot easier for anyone to surf the web.
By 1999, the internet was a household technology. But by that point, if you were looking to make a killing off it, you might’ve found you were a bit late to the party.
Even though big corporations and government agencies have long been able to rely on AI in some form, it is just now becoming more accessible to regular people. Maybe your kids or grandkids use it to help with their homework. Maybe you use it at work or at home to build spreadsheets.
And this newfound accessibility is setting AI up for an explosive move.
That’s why we think 2025 will see the AI Revolution reach a whole new level.
As a result, AI will drive a ton of wealth like the internet did in the ’90s… and, more recently, as smartphones did throughout the 2010s.
Now, chipmakers, ChatGPT, and other new AI apps being developed by Big Tech are the first generation of AI. And just like the dot-com era, there is still a lot more money to be made from this revolutionary technology.
The next winners of the AI Boom will use generative AI to create profitable companies and reshape existing occupations. This will launch the kind of transformational change we only see once every 25 years. And these changes will roll out across society and reshape America on the same historic scale we last saw in the late ’90s.
I call these “next-gen AI companies.”
Simply put, these companies use AI to reinvent or automate some of our oldest business models.
While the rest of the market is still focused on the old story of first-generation AI, now is the time to switch gears and focus on these next-gen AI companies. This is the chance to get into the kind of once-a-quarter-century seismic shift that can create millionaires, beginning with just a small stake in the right investments.
While this report may have a few names you’ve heard of, I have identified a few other unexpected stocks that I expect to benefit from this seismic shift. Let’s take a look…
5 AI Stocks to Buy Now
Stock No. 1: The AI Leader
No discussion about AI can begin without addressing the elephant in the room.
I’m talking about NVIDIA Corp. (NVDA).
NVIDIA is a leader in graphic processing units (GPUs), the complex chips that help run computer games, rendering software, and any other applications involving visuals. The Silicon Valley company has more than 7,000 patents relating to field, the largest portfolio of its kind.
NVIDIA has been in the computer graphics business for more than two decades – it invented the GPU in 1999 – so it is a well-established player. Since 2014, the company has shifted its focus to five major markets: gaming, professional visualization, data centers, autos and artificial intelligence.
In the late 2010s, NVIDIA began receiving some unusual orders. Not only were crypto enthusiasts buying up high-end GPUs to mine cryptocurrency, but machine-learning researchers were using the cards to train their AI models.
It turns out that the parallelization that GPUs use to render graphics also made them extremely powerful at crypto and AI tasks. By breaking up tasks into smaller chunks, GPUs outpaced even the best CPUs in these types of computations.
Data storage provider Pure Storage estimates that GPUs are roughly three times faster than an equivalent CPU for machine-learning algorithms. That is an enormous advantage in a world where large models can require months to train and cost millions of dollars.
That puts NVIDIA on the fast track to success. The firm has an enormous head start with its portfolio of valuable patents and internal research. No company comes close.
Its financial success also creates the research and development (R&D) budget for NVIDIA to stay ahead. Since 2017, the firm has raised its R&D budget by over 500%, dwarfing Advanced Micro Devices, Inc.’s (AMD) 318% rise and Intel Corp.’s (INTC) 34% hike. Each dollar spent also goes further from a financial standpoint… NVIDIA doesn’t actually produce the chips it designs, so there’s no need to invest in R&D to enhance the manufacturing process.
Finally, NVIDIA is cementing its lead with its CUDA software, the proprietary code that helps connect NVIDIA’s GPUs together. The system essentially compels programmers to optimize their code for NVIDIA processors, which means any future non-NVIDIA processor will require code rewrites. (Intel and AMD have a similar lock over the X86-64 architecture in traditional servers for related reasons.)
Turning to the numbers, for fiscal 2025, analysts expect earnings of $2.84 per share on revenue of $125.66 billion, up 138.7% from earnings of $1.19 per share and 125.6% from revenue of $55.71 billion a year ago.
Add it all up, and NVIDIA should continue to outpace its rivals for the foreseeable future. Though NVIDIA has historically traded at a premium, we believe the company’s incredible growth and wide competitive moat make it worth every penny.
Stock No. 2: Bringing AI to Law Enforcement
Back in 1993, brothers Rick and Tom Smith invented a gun that fires electrified darts and founded the company Taser International.
Since then, the company – now known as Axon Enterprise, Inc. (AXON) – has grown by leaps and bounds.
While Axon is primarily known for developing the Taser, which is used by law enforcement officials in the U.S. and abroad, the company offers a wide variety of “smart” weapons, body cameras, vehicle cameras and software.
Axon boasts that, since its founding, its products have saved 282,436 people from either death or serious bodily injury. It notes that its products have been used by officers around the world 5.23 million times. Axon also wants to slash gun-related deaths between police officers and the public by 50% by 2032.
Besides law enforcement, the company’s products are used in several industries, including prisons, federal civilian and defense agencies, fire response, emergency medical services, private security, healthcare security, campus protection and personal safety. Axon claims a total addressable market of $50 billion, with sales potential in state and local governments, federal governments around the world and commercial enterprises.
Today, Axon is using artificial intelligence to enhance its products. In fact, the company has been working on a six-year plan to use AI for transcription, video redaction and editing, and automated license plate recognition, as well as to pull data from officers’ body camera videos to aid in writing police reports.
Currently, Axon’s AI Research team is working to cut the time officers are spending on paperwork by improving the efficiency and accuracy of report writing and information analysis. And they are working on this mission in three key ways:
- Automated redaction: Allowing officers to share footage with the public quicker than ever before while also protecting the privacy of individuals in videos.
- Accelerated review: Helping law enforcement supervisors to better understand compliance and provide feedback that advances training and police-community relations.
- Automated reporting generated directly from video and audio: Freeing officers up to spend more time out in the field rather than sitting at a desk writing up reports.
Looking at fiscal 2025, analysts expect earnings of $6.25 per share on revenue of $2.55 billion, up 19.96% from earnings of $5.21 per share and 23.04% from revenue of $2.08 billion a year ago.
Stock No. 3: Building out the AI Boom
It’s no secret that you can’t have AI without data centers. The problem, though, is that most data centers built up until recently simply weren’t designed to handle the immense compute power needed for AI.
That’s where EMCOR Group, Inc. (EME) comes in.
The company provides everything from data center services to electrical maintenance, from new construction to energy services and upgrades. And with the U.S. looking to upgrade to more energy-efficient systems, as well as to onshore more chip production, EMCOR stands directly in line to benefit.
You may recall that the CHIPS and Science Act was inked with the intention to provide about $53 billion to support the production of semiconductors in the U.S. Under the act, the U.S. aims to construct at least two manufacturing clusters (including fabrication plants, R&D facilities, packaging and assembly facilities, and suppliers) for the production of semiconductors by 2030.
Big-name semiconductor companies like Intel, Samsung, Taiwan Semiconductor, Micron Technology and Texas Instruments have all also pledged to expand and upgrade their facilities in the U.S. All of which is creating strong demand for the services and solutions that EMCOR provides.
Below is a sampling of the services and solutions that EMCOR Group provides through its three businesses.
- EMCOR Construction Services employs contractors with mechanical and electrical experience in several U.S. markets, including commercial, education, healthcare, hospitality, institutional, manufacturing, transportation and water/wastewater treatment. Its services range from new facility construction to fire safety, from data center services to electrical maintenance, from commercial and industrial HVAC duct work to project management.
- EMCOR Buildings Services provides a range of comprehensive building services, including site maintenance, renovation and retrofits, energy services, HVAC and mechanical services, landscaping, construction and energy efficiencies upgrades.
- EMCOR Industrial Services collaborates with clients in heavy industries, providing quality assurance and quality control services, engineering, expertise in handling hazardous materials and chemicals, construction and fabrication services.
When it comes to the data center buildout required for the AI Boom to continue, EMCOR sits right in the catbird seat.
That’s why analysts expect revenues to grow 14% in fiscal 2024, and for net income to rise 21%, and actual growth rates will likely be far higher… EMCOR has beat quarterly earnings estimates by roughly 30% since 2023.
Stock No. 4: Helping Power the AI Boom
Vistra Corp. (VST) is an integrated retail electricity provider based in Texas. It happens to be the largest power generator in the U.S., with a capacity of approximately 39 gigawatts, supplied by diverse energy sources such as natural gas, nuclear, solar and battery storage facilities.
Now, you may be thinking… What does a utility company have to do with the AI Boom?
It’s simple, really. AI needs power. A lot of it.
For example, according to the World Economic Forum, it took about 1,300 megawatt hours (MWh) of electricity to train OpenAI’s language model, GPT-3. This is similar to the power consumption of 130 U.S. homes annually.
The more advanced GPT-4 model may have required 50 times more power than that. And it’s estimated that the overall computational power needed for maintaining AI’s growth is doubling every 100 days.
According to estimates from Boston Consulting Group, AI will account for 16% of America’s energy consumption and reach 130 gigawatts by 2030.
It’s hard to even comprehend how much power we’re talking about. So, this has led to some big deals in unexpected places to meet this crazy demand.
For example, back in September 2024, Microsoft Corporation (MSFT) inked a deal with Constellation Energy Corporation (CEG) to revitalize the Three Mile Island nuclear plant in Pennsylvania.
As part of the terms, Constellation will spend $1.5 billion to bring one of the plant’s reactors back online, which is expected to be completed by 2028. In return, as part of the 20-year deal, Microsoft will pay a “significant” premium over market rates to secure the power to meet the demands of its data center buildout.
As you may or may not remember, this is the same plant where a partial meltdown in 1979 led to a nationwide slowdown in adopting nuclear as an energy source. So, in other words, AI is single-handedly revitalizing the nuclear power industry.
Sensing the trend, in March 2024, Vistra completed a previously announced $3.4 billion deal to acquire Energy Harbor, making Vistra the second-largest nuclear power provider in the U.S. The company also owns the Moss Landing Power Plant in California, which contains the largest battery energy storage system in the world.
I should also add that since the bulk of Vistra’s operations are in Texas, it benefits from the ability to set prices based on market factors instead of having to deal with regulators.
For fiscal 2024, analysts expect earnings of $4.60 per share on revenue of $17.12 billion, up 28.5% from earnings of $3.58 per share and 15.9% from revenue of $14.78 billion in fiscal 2023.
Stock No. 5: Power Solutions for the AI Boom
With the advent of AI, data usage has doubled between 2020 and 2023, and it’s expected to jump another 50% by 2025. In fact, we’re expected to create twice as much data in the next five years compared to what we created in the previous 10 years. To put that in perspective, we now generate nearly 1 trillion gigabytes of data a day!
That’s enough to download every single movie ever made – over 600,000 times – every day.
The fact of the matter is that as AI learns and becomes more powerful, we need more data centers. And we need more powerful and efficient ones, too.
Vertiv Holdings Inc. (VRT) is a leader in power and thermal management for data centers.
In 1965, Ralph Liebert built a prototype computer room air conditioning (CRAC) system in his Columbus, Ohio, garage. He brought it to Chicago, where he demonstrated it at IBM. Executives there were so impressed that they arranged to have the CRAC unit debuted at the World Computer Conference later that year.
The conference was a success. Liebert’s company would soon move into a 150,000-square-foot facility in Ohio to keep up with demand and would go public in 1981. Six years later, Emerson Electric acquired the firm for $430 million, or $1.2 billion in today’s dollars.
Then, in 2016, Emerson Electric spun out this lucrative business for $4 billion and rebranded the entity to what we know it as today: Vertiv Holdings.
Currently, Vertiv is a global leader in not just the cooling of data centers, but also power management products, switchgear rack systems and management systems for monitoring and controlling digital infrastructure. In other words, the company offers the entire suite of critical digital infrastructure technologies required to build and run data centers.
Business has been swift for this global leader. In 2023, the company’s backlog grew 16% to $5.5 billion – enough to sustain a full year of production. Its lucrative service revenues have also grown, though at a slower 7.6% rate.
Simply put, Vertiv has become an essential, global player in keeping data centers running. The company employs more than 3,500 field service engineers spread across 200 service centers worldwide, and this network allows the company to quickly respond to emergencies and reduce downtime.
It also boasts a first-time fix rate of more than 80% during site emergency visits. These services are essential, because a typical failure at an enterprise data center costs more than $5 million. (One notable two-hour outage at Meta Platforms, Inc. (META) in 2024 reportedly cost the firm $100 million in sales!) According to Vertiv, almost half of these outages are caused by power failures or faulty cooling systems.
Vertiv also continues to build out the tools needed for the next AI Boom.
Since 2018, the firm has made roughly five separate billion-dollar acquisitions spanning air handling systems to electrical switchgear. In December 2023, the firm acquired CoolTerra, an existing partner that provides coolant distribution for data centers. That’s putting Vertiv on an incredibly fast growth track.
For the current fiscal year, analysts expect earnings of $2.69 per share on revenue of $7.82 billion, up 51.98% from earnings of $1.77 per share and 13.92% from revenue of $6.86 billion in fiscal 2023.
There’s Always a Bull Market Somewhere
There’s always a bull market somewhere – and right now the bulls are piling into fundamentally superior stocks.
The five top stocks we discussed today fit this description to a “T” and are great bets for your money in 2025.
I hope you found this special report useful. Before we go, let me remind you that you’re now also a member of my free Market 360 newsletter.
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Sincerely,
Louis Navellier
Editor, Market 360
