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The AI Investing Pulse

August 7, 2025

In this Week’s Edition:

1. Analysis - The top AI stocks to watch in August

2. Stock Ideas - Merging AI and Quantum computing: Here's the stock to watch

3. News - Morgan Stanley boosts Meta target to $850 on strong Q2 results

4. Startups - Why most ai startups won’t survive 2026 and what the smart ones are doing differently

5. Trends - The agentic AI revolution: Experts explain key business trends

6. Other News - The 5 biggest global business rivalries to watch

The Top AI Stocks to Watch in August

August brings fresh opportunities for AI investors, with market momentum and innovation showing no signs of slowing. This week, we take a closer look at the top analyst picks from Morningstar and Motley Fool. Each stock is then evaluated using our proprietary AIIP (AI Investing Pulse) Methodology*, a data-driven model that ranks more than 170 AI-linked companies by their underlying growth, financial quality, and market momentum.

The goal: to highlight the companies combining real price strength with robust underlying fundamentals. Here’s how the August picks measure up—through both the lens of leading analysts and our own model.

🌅 Morningstar’s Five “Cheap Stocks” for August

Alphabet $GOOG ( ▼ 0.88% )  
Morningstar’s view: Alphabet is seen as the most undervalued of the “Magnificent 7”, trading at a 20% discount to fair value. Morningstar believes market worries about DOJ lawsuits and AI disrupting Google Search are overdone, noting AI is actually boosting growth and profitability.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 93 | RS Score: 47
Alphabet boasts the strongest fundamentals in the group, but lacks the price momentum required for Watchlist inclusion.

Adobe $ADBE ( ▲ 1.06% )  
Morningstar’s view: Adobe trades at a 38% discount to fair value. Morningstar expects its new AI tools like Firefly and AI Assistant to offset fears that AI will disrupt Creative Cloud, projecting strong growth ahead.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 70 | RS Score: 4
Adobe’s business quality meets the fundamental threshold, but it currently shows very little market momentum.

Salesforce $CRM ( ▲ 0.83% )  
Morningstar’s view: Trading at a 23% discount, Salesforce is praised for smart use of AI in its platform, delivering steady revenue and earnings growth.
AIIP view: Not classified | Fundamental Score: 50 | RS Score: 33
Salesforce does not meet the minimum scores for either Fundamentals or Momentum ranking in our model.

Workday $WDAY ( ▼ 0.89% )  
Morningstar’s view: With a 26% discount to fair value, Workday’s AI-powered HR and finance solutions provide a long-term growth runway.
AIIP view: Not classified | Fundamental Score: 62 | RS Score: 35
Workday’s scores currently fall short of the minimum criteria for Fundamental or Momentum status.

🚀The Motley Fool’s Picks for August

Micron Technology $MU ( ▼ 1.21% )  
The Motley Fool’s view: Micron is described as a bargain, supplying critical memory for AI and trading at a low valuation despite ongoing demand from AI accelerators and smartphones.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 86 | RS Score: 47
Micron is fundamentally sound, but price momentum is muted compared to top movers.

Alphabet $GOOG ( ▼ 0.88% )  
The Motley Fool’s view: Alphabet is the “cheapest big tech stock by far” according to the Fool, with diverse growth drivers in YouTube, Cloud, and search. AI features are supporting continued dominance.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 94 | RS Score: 47
Exceptional business quality, but momentum is not yet there for Watchlist status.

Nvidia $NVDA ( ▼ 3.5% )  
The Motley Fool’s view: Nvidia is labelled the “top AI stock” for its dominant GPUs in AI training. The Fool highlights its leading market position and potential for growth if China export issues resolve.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 100 | RS Score: 79
Nvidia is nearly a Watchlist stock—its fundamentals are unmatched, and its momentum is about to hit our threshold of 80.

Taiwan Semiconductor $TSM ( ▼ 3.61% )  
The Motley Fool’s view: TSM is central to AI chip manufacturing, with strong revenue growth and reasonable valuation, making it a critical AI enabler.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 100 | RS Score: 71
TSM’s core position in the AI supply chain is undeniable, and with momentum near the Watchlist mark, it’s one to keep on the radar.

ASML $ASML ( ▼ 0.53% )  
The Motley Fool’s view: ASML’s technological monopoly on EUV lithography secures its position at the heart of chipmaking for AI, despite near-term macro headwinds.
AIIP view: Ranking Status: Fundamental | Fundamental Score: 92 | RS Score: 12
Long-term leader, but currently lacking market momentum for a Watchlist position.

✨ Final Take

A clear theme emerges: almost all the highlighted stocks boast robust business fundamentals, yet most currently lack the market momentum required to make our Watchlist. Nvidia and Taiwan Semiconductor stand out as notable exceptions, with Relative Strength scores in the 70s—making them especially worth monitoring if momentum builds further.

While the market remains on the hunt for the next big AI winner, these companies offer resilient business models and valuable exposure to the core sectors shaping the AI economy. As always, diligent research and disciplined risk management are crucial when making any investment decision.

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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.}

_{*Methodology & Scores - All scores are proprietary and calculated using data from Finbox (powered by S&P Global Intelligence). Total Score combines metrics for Sales and EPS Growth, Financial Quality, and Valuation, to assess overall business strength (out of 100). Relative Strength (RS) Score measures a stock’s price performance relative to the AI universe (173 AI-focused public companies). Ranking Status is assigned based on score combinations: Fundamental: Total Score ≥ 70, RS < 80. Momentum: RS ≥ 80, Total Score < 70. Watchlist: Total Score ≥ 70 and RS ≥ 80.}

TOP AI STOCKS PERFORMANCE

TOP AI ETFs PERFORMANCE

AI STOCKS IDEAS 

Merging AI and Quantum computing: Here's the stock to watch - Yahoo Finance

Believe robotics is the future? Here are 3 AI stocks to grab now - 24/7 Wallst

Top Canadian AI stocks to watch in 2025 - Yahoo Finance

AI STOCKS & ETFs NEWS 

Morgan Stanley boosts Meta target to $850 on strong Q2 results - Yahoo Finance - Morgan Stanley raised Meta's price target to $850, citing strong AI advancements and robust Q2 earnings.

Invest 150K in Tesla today to become a millionaire, Elon Musk says this is probably correct - stocktwits - Elon Musk believes investing $150,000 in Tesla could lead to millionaire status over time, highlighting the company's growth potential.

Cathie Wood bought more Nvidia - MSN - Nvidia's stock has retreated to about $173 amid market volatility, but analysts maintain a favourable outlook, projecting potential recovery to approximately $183.

AI STARTUPS

Why most ai startups won’t survive 2026 and what the smart ones are doing differently - Medium - Most AI startups face failure by 2026 due to dependency on external models and lack of unique offerings. Success requires proprietary infrastructure development and addressing foundational challenges like market fit and data security.

Are AI features increasing the value of startups? - TechRound - Startups with AI features saw valuations significantly exceed non-AI counterparts, raising $26.9 billion in funding in 2024. This trend reflects AI's role as a key value driver across diverse industries. 

AI cybersecurity drive next wave of M&A - The Economic Times - AI is transforming cybersecurity in India, enhancing defenses against sophisticated cyberattacks and facilitating growth in the sector.

AI TRENDS

The agentic AI revolution: experts explain key business trends - ITBrief - Agentic AI is poised to transform business operations. Key trends include multi-agent collaboration, self-healing systems, and significant cost reductions in customer service by 2029.

What the “2025 future of professionals report” urges corporate functions leaders to do today - Reuters - Corporate leaders must develop AI strategies and invest in talent development to enhance efficiency and add value in corporate functions.

How AI amplifies these other tech trends that matter most to business in 2025 - Znet -  AI is set to enhance key technology trends like automation, data analytics, and cybersecurity, making them integral to business strategies by 2025.

OTHER

The 5 biggest global business rivalries to watch - Fortune - The 2025 Fortune Most Powerful People in Business list reveals intense rivalries among tech CEOs, with Nvidia's Jensen Huang leading.

Agentic AI: the rise of autonomous intelligence and the need for adaptive cybersecurity - Business Day - Agentic AI enhances cybersecurity by automating threat detection and response, while also presenting risks as cybercriminals can exploit its capabilities.

_{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}