AI Stocks to Invest in for Beginners

Here’s why investors looking to invest in AI stocks can consider owning SMCI, MSFT, and NVDA right now.

| More on:
A robotic hand interacting with a visual AI touchscreen display.

Source: Getty Images

The artificial intelligence (AI) megatrend has the potential to generate sizeable wealth for early investors. According to a Statista report, the total addressable market for AI is forecast to expand from US$136 billion in 2023 to US$827 billion in 2030, indicating an annual growth rate of almost 30%, providing sector leaders with an opportunity to grow revenue and earnings at a rapid pace.

While investing in AI stocks might seem overwhelming to new investors, here are three top tech stocks you can consider buying today to benefit from multiple secular tailwinds.

Nvidia stock

It’s impossible to ignore Nvidia (NASDAQ:NVDA), given that the chipmaker is shovelling the AI gold rush. Valued at US$2.4 trillion by market cap, Nvidia stock is down 26% from all-time highs. Despite the recent pullback, Nvidia has returned a monstrous 22,680% to shareholders in the past decade.

While Nvidia is among the largest companies in the world, its growth story is far from over. For instance, Wall Street analysts expect Nvidia’s earnings per share to expand from US$1.3 per share in fiscal 2024 (ended in January) to US$2.72 per share in 2025 and US$3.74 per share in 2026. So, priced at 36.7. times forward earnings, Nvidia stock trades at a “reasonable” valuation given its growth forecasts.

Last week, investment firm Morgan Stanley maintained an “overweight” rating on Nvidia with a price target of US$144, indicating an upside potential of over 40%.

Meanwhile, analysts and investors will be closely watching Nvidia’s data centre performance, a business that grew its sales by 427% year over year in the fiscal first quarter (Q1) of 2025.

Microsoft stock

Valued at US$2.93 trillion by market cap, Microsoft (NASDAQ:MSFT) is the largest company globally. With roughly US$250 billion in annual sales, Microsoft enjoys an early mover advantage in the AI race due to its sizeable investment in OpenAI, the parent company of ChatGPT.

In fiscal Q4 of 2024 (ended in June), Microsoft’s Office 365 software sales rose 12% year over year, while personal 365 subscriptions increased from 80.8 million to 82.5 million in the last three months. Moreover, LinkedIn sales were up 10%, and its cloud business saw a 29% uptick in the top line.

Despite an uncertain environment, Microsoft increased sales by 15% to US$64.7 billion and earnings by 10% to US$2.95 per share in the June quarter.

Super Micro Computer stock

The final AI stock on my list is Super Micro Computer (NASDAQ:SMCI), a distributor and manufacturer of information technology solutions and other computer products. While SMCI stock is down 49% from all-time highs, it has returned over 2,000% to shareholders since August 2014. In its most recent quarter, Super Micro Computer more than tripled its sales and quadrupled earnings per share.

Super Micro manufactures high-density servers that are required to run AI applications, driving its sales growth in the last year. Analysts expect SMCI to increase sales by 109.7% to US$14.93 billion in 2024 and earnings by 102% to US$23.86 per share in 2024.

Priced at 25.5 times forward earnings, SMCI stock is quite cheap and trades at a discount of over 50% to consensus price target estimates.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Microsoft and Nvidia. The Motley Fool has a disclosure policy.

More on Tech Stocks

Snowflake logo in snowflake office on wall_snowflake-1
Tech Stocks

Here’s Why Snowflake Stock Skyrocketed Today

Shares of the data company are up 32% for the day.

Read more »

man touching magnifying glass button on floating search bar internet google search engine
Tech Stocks

Why Alphabet Stock Was Sliding Today

The parent company of Google is facing heat from U.S. regulators.

Read more »

chart reflected in eyeglass lenses
Tech Stocks

Top Canadian AI Stocks to Watch in 2025

Celestica (TSX:CLS) stock and another Canadian AI stock are worth watching closely this holiday season.

Read more »

Nvidia Voyager Headquarters
Tech Stocks

Why Nvidia Stock Rallied (Again) on Tuesday

The chipmaker is expected to report earnings this evening.

Read more »

hand stacking money coins
Tech Stocks

3 Growth Stocks That Are Screaming Buys in November

The market might be soaring, but there are still lots of deals to be had. Here are three discounted stocks…

Read more »

Rocket lift off through the clouds
Tech Stocks

Why I’d Buy Constellation Software Stock, Even at Today’s Prices

Despite trading at a relatively frothy multiple, Constellation Software (TSX:CSU) stock still looks like a buy right now.

Read more »

profit rises over time
Tech Stocks

2 Reasons to Buy Kinaxis Stock Like There’s No Tomorrow

Solid revenue growth, improving profitability, and its focus on AI-powered supply chain solutions make Kinaxis stock really attractive to buy…

Read more »

Muscles Drawn On Black board
Tech Stocks

3 No-Brainer Tech Stocks to Buy Right Now for Less Than $500

If you have a bit of cash you're looking to set aside, these are the easiest tech stocks for some…

Read more »