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- The AI Stocks to Watch in May
The AI Stocks to Watch in May
Together with
The AI Investing Pulse
May 8th, 2025
In this Week’s Edition:
Analysis & Stock Ideas - The AI Stocks to Watch in May
News - Key Highlights of Palantir's Q1 2025 Earnings
Startups - OpenAI Reaches Agreement to Buy Startup Windsurf for $3 Billion
Trends - Energy, Water, AI and Climate: Tech's Hidden Footprint
Other News - How Does the Stock Market Benefit from AI and Data Science
🧠 The AI Stocks to Watch in May
While the QQQ and SPY remain flat this month, momentum continues to build around companies fuelling the AI economy — from semiconductor manufacturers and cloud giants to data centre infrastructure providers.
In this week’s roundup, we’ve reviewed insights from leading research platforms — including The Motley Fool, Zacks, Insider Monkey and Barchart — to surface the top AI stocks on their radar. The clear theme emerging? Infrastructure leadership, scalable growth, and a renewed focus on valuation discipline.
🧠 4 AI Stocks to Watch
ASML (ASML) - Market Cap: $269B | Perf. YTD: 1.5% | Forecast Sales Growth: 14.1% & EPS Growth: 21.4%
ASML holds a global monopoly on EUV lithography machines—critical for making today’s most advanced AI chips. Its dominant position cements it as the backbone of the semiconductor supply chain.
Meta (META) - Market Cap: $1.5T | Perf. YTD: 2% | Forecast Sales Growth: 14.1% & EPS Growth: 8.6%
Meta’s Llama 4 models now reach nearly 1 billion monthly users, with WhatsApp emerging as a primary AI interface. The launch of a dedicated Meta AI app signals head‑to‑head competition with OpenAI and Google
Amazon (AMZN) - Market Cap: $2T | Perf. YTD: -14% | Forecast Sales Growth: 9.1% & EPS Growth: 14.3%
The cloud computing titan, Amazon remains a foundational player in the AI ecosystem through AWS — a global leader in hosting, processing and deploying AI models at scale.
AMD (AMD) - Market Cap: $162B | Perf. YTD: -16.9% | Forecast Sales Growth: 22.3% & EPS Growth: 354%
The GPU disruptor, AMD’s MI325X chip — a strong alternative to Nvidia’s H100 — is set to roll out via Microsoft Azure, offering high bandwidth and competitive generative AI performance.
Source: The Motley Fool
🔍 Top 3 Under-the-Radar AI Stocks
Oracle (ORCL) - Market Cap: $419B | Perf. YTD: -9.8% | Forecast Sales Growth: 7.8% & EPS Growth: 64.8%
Oracle is now a serious player in AI infrastructure, partnering with OpenAI, Meta, and NVIDIA, and supplying GPU clusters for large-scale deployments. TD Cowen maintains a Buy rating with a $210 target.
Vertiv (VRT) - Market Cap: $36.4B | Perf. YTD: -15.9% | Forecast Sales Growth: 18.3% & EPS Growth: 185%
Vertiv provides power and cooling systems for AI data centres and is viewed as a key infrastructure enabler. Its $7.9B backlog and collaboration with NVIDIA on pre-fab AI factories reinforce its long-term relevance.
Coherent (COHR) - Market Cap: $10.7B | Perf. YTD: -26.5% | Forecast Sales Growth: 21% & EPS Growth: 293%
Coherent manufactures advanced optical components like 800G transceivers for high-speed AI networking. Raymond James upgraded the stock to Strong Buy, citing accelerating demand from data centre operators.
Source: Insider Monkey
📈 Also in Focus
Analysts at Barchart and Zacks highlight Alibaba (BABA) for its resurgence via Alibaba Cloud’s expanding AI services and TSMC (TSM) for its pivotal role in the AI chip supply chain, driven by growing U.S. capacity investments and robust AI revenue growth.
Alibaba (BABA) - Market Cap: $280B | Perf. YTD: +45.3% | Forecast Sales Growth: 6.2% & EPS Growth: 125%
Taiwan Semiconductors (TSM) - Market Cap: $795B | Perf. YTD: –11.4% | Forecast Sales Growth: 26.9% & EPS Growth: 31.7%
🎯 The AI Stock Tracker
Our growth‑weighted model scans 171 AI stocks twice weekly for the ideal mix of revenue momentum, financial strength, valuation realism and top 20% relative strength versus our full AI universe. Here are this week standouts from our list:
Applovin $APP ( ▼ 3.23% ) – Market cap: $102 B | YTD: –6.3% | Forecast Sales Growth: 22% & EPS growth: 82.8%
Tempus $TEM ( ▼ 5.9% ) – Market cap: $10.1 B | YTD: +74.1% | Forecast Sales Growth: 78.4% & EPS growth: 91.4%
Duolingo $DUOL ( ▲ 1.82% ) – Market cap: $22.5 B | YTD: +52.8% | Forecast Sales Growth: 33.1% & EPS growth: 102%
As investor interest in AI continues to expand, the real opportunities may lie not just with the headline giants but in the infrastructure, hardware, and platform companies quietly powering the ecosystem.
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Disclaimer - This content is provided for informational purposes only and does not constitute investment advice, personal recommendations, or an invitation to engage in any investment activity. The information presented is derived from publicly available sources and should not be solely relied upon for making investment decisions. Always consult with a qualified financial professional before making investment choices. Past performance is not a guide to future performance. Data source: Standard & Poors Market Intelligence.
TOP AI STOCKS PERFORMANCE
COMPANY | SECTOR | WEEKLY |
|---|---|---|
Duolingo (DUOL) | Consumer Discretionary | 25.9% |
Constellation Energy (CEG) | Utilities | 22.5% |
Applovin (APP) | Technology | 13.1% |
TOP AI ETFs PERFORMANCE
ETFs | SECTOR | WEEKLY |
|---|---|---|
Roundhill Inv. (CHAT) | Gen AI & Tech | 5.0% |
iShares (ARTY) | Future AI & Tech | 3.9% |
KraneShares (AGIX) | AI & Tech | 2.9% |
AI STOCKS & ETFs NEWS
Key Highlights of Palantir's Q1 2025 Earnings - QZ- Palantir Technologies reported a 39% revenue growth year-over-year, meeting EPS expectations. Despite a strong financial performance, the stock dipped slightly.
Generative AI Overtakes Security in Global Tech Budgets for 2025 - Venturebeat - In 2025, generative AI spending is set to surpass traditional tech budget priorities, as companies focus on its transformative potential and technological advantages.
Bernstein Maintains AMD Stock Rating, Lowers Price Target - Investing.com - Bernstein has reduced AMD's price target to $95, citing competitive pressures and operational challenges, despite strong liquidity and some analysts maintaining a "Buy" rating.
AI STARTUPS
OpenAI Reaches Agreement to Buy Startup Windsurf for $3 Billion - Economic Times - OpenAI has agreed to acquire the AI coding tool startup Windsurf for approximately $3 billion, marking its largest acquisition yet, aimed at enhancing its AI coding technologies.
Why AI Won't Replace Venture Capitalists any Time Soon - Inc.com- Venture capitalists remain essential for their expertise and decision-making in identifying startups, while AI assists by automating tasks.
AI Agents Builder Trousers Bags $37 Million Series B - Startup Daily - A startup focusing on creating AI agents has secured $37 million in Series B funding to enhance its offerings and support businesses in developing specialized AI systems.
AI TRENDS
Energy, Water, AI and Climate: Tech's Hidden Footprint - NPR - The article examines the environmental effects of AI, highlighting concerning energy and water consumption, and the potential need for nuclear power as a cleaner energy source to meet rising demands.
HR Departments Could Be Set for a Major Shake-up as AI Takes Hold - Techradar - AI is transforming HR by enhancing decision-making, increasing efficiency, and improving employee experience, pushing 92% of companies to invest in AI integration across various HR functions.
OTHER
How Does the Stock Market Benefit from AI and Data Science - Analyticsinsight - AI and data science enhance stock market operations by providing faster trading, improved predictions, optimized portfolios, and better risk management, ultimately benefiting traders and investors.
US Government is using AI for Unprecedented Social Media Surveillance - New Scientist - The US government is leveraging AI for extensive social media monitoring, focusing on immigrants and visa applicants, raising significant privacy and civil liberties concerns alongside potential security benefits.
Disclaimer - The information contained on this newsletter does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice. Data sources: S&P Global Market Intelligence