Top AI Stocks to Watch in February - Leaders & Laggards

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The AI Investing Pulse

February 6th, 2025

In this week’s edition:

1. Analysis - Top AI stocks to watch in February - Leaders & Laggards

2. News - AI Markets were deceived to believe In DeepSeek’s low training costs

3. Startups - Four Chinese AI startups to watch beyond DeepSeek

4. Trends - Goldman Sachs starts process of replacing bankers with AI

5. Other News - Superagency - Empowering people to unlock AI’s full potential

Top AI Stocks to Watch in February

Artificial intelligence continues to dominate the investing landscape in 2025. However, the past week has been a rollercoaster for AI stocks, with major earnings reports, geopolitical developments, and competitive threats shaking up the sector.

This week, we look at some of the top AI stocks to watch in February, based on insights from leading financial sources, including Investopedia, The Motley Fool, Simply Wall St, Citi, Bank of America, and more.

Palantir Technologies (PLTR) Surges on AI Demand

Palantir has emerged as one of the standout AI stocks this month. Investopedia listed Palantir as a “Stock to Watch” in February, citing its growing role in AI-driven defence and enterprise applications. The demand for Palantir’s Artificial Intelligence Platform (AIP), leading Wedbush, Bank of America, and Morgan Stanley to raise their price targets. Meanwhile, The Motley Fool described Palantir as a “no-brainer” AI stock, reinforcing its position in the AI software sector. Citi Research, Analyst Tyler Radke raised his price target for Palantir following strong Q4 earnings, citing significant growth in U.S. commercial bookings and new customer additions. However, he maintained a neutral rating, expressing concerns about valuation and long-term sustainability. The stock is up over 34% year to date.

Nvidia (NVDA) Faces Growing Pressure

For years, Nvidia has dominated the AI chip market, powering the AI revolution. However, its 16% stock decline last week has raised questions about whether it can maintain its pricing power as competitors AMD and Broadcom gain ground. Investopedia flagged concerns over Chinese AI startup DeepSeek, which is developing low-cost AI models using Nvidia’s H800 chips. Trade tariffs have also added to the pressure. BofA Securities, Analyst Vivek Arya suggested that DeepSeek’s AI advancements could actually benefit Nvidia, as its models are built using older Nvidia processors. Arya believes that companies using Nvidia’s latest AI chips will have a significant technological edge. The stock is down 7% year to date.

AMD (AMD) Reports Record Earnings but Faces Market Skepticism

AMD reported record Q4 revenue of $7.66 billion, up 24% year-over-year, yet its stock fell 8% in extended trading. While data centre revenue surged 69%, Investopedia noted that earnings fell short of expectations, triggering a post-earnings decline. The Motley Fool remains bullish, arguing that AMD's MI300X AI GPU could capture market share from Nvidia in 2025. Bank of America & Citi, both firms downgraded AMD’s stock after its AI data centre sales ($1.75 billion) missed the expected $2 billion, citing Nvidia’s dominance as a key concern. The stock is down 7.3% year to date.

Amazon (AMZN) – AI Driving E-Commerce and Cloud Growth

Amazon continues to expand its AI capabilities across its e-commerce and cloud businesses, using AI to optimize logistics, enhance search, and personalise recommendations. The Motley Fool highlighted Amazon’s AI-driven retail dominance and its ability to leverage AI to improve margins and efficiency. AWS remains a major AI infrastructure provider, positioning Amazon for long-term AI-led growth. The stock is up 7.6% year to date.

C3.ai (AI) Gains Recognition in Enterprise AI

C3.ai is gaining recognition after achieving “awardable” status with the U.S. Department of Defense, strengthening its credibility in the government AI sector. Investor’s Business Daily reported that C3.ai expects fiscal 2025 revenue close to $400 million, surpassing analyst expectations. Despite trading below its 50-day moving average, analysts are watching its enterprise AI adoption closely. The stock is down 0.7% year to date.

Meta Platforms (META) – AI Powering Social Media and Advertising

Meta is integrating AI across Facebook, Instagram, and WhatsApp, using machine learning to improve content recommendations and develop AI-powered chatbots. AI-driven advertising tools are also enhancing campaign targeting and optimisation. The Motley Fool highlighted Meta’s investment in generative AI, noting that AI-driven engagement is boosting ad revenue. Analysts expect AI to play a major role in Meta’s long-term digital advertising growth. The stock is up 20.3% year to date.

Tempus AI (TEM) – Expanding in Healthcare AI

Tempus AI has gained attention following an upgrade from TD Cowen, which reinstated coverage with a ‘Buy’ rating and raised its price target to $74. The upgrade comes after Tempus AI’s acquisition of Ambry Genetics, a profitable germline testing lab generating over $300 million in revenue. Analysts expect this move to expand product offerings and drive cash flow. The stock is up 104% year to date, reflecting strong momentum.

Palo Alto Networks (PANW) – AI-Powered Cybersecurity Leader

Palo Alto Networks is leading in AI-driven cybersecurity, integrating machine learning and generative AI to enhance real-time threat detection. PANW is set to release fiscal Q2 2025 earnings in February, with Wall Street expecting strong enterprise AI security spending to drive results. Analysts at Jefferies and Citi raised price targets, citing AI-driven market share growth. The stock is up 2.7% year to date.

AppLovin (APP) – AI-Powered Advertising Driving Growth

AppLovin is set to report earnings on February 12 after a 700% stock surge in the past year, making it the top-performing stock in the Russell 1000. Shares jumped nearly 50% after its last earnings report in November. AI-powered ad tools continue to fuel rapid growth, with Q3 ad revenue up 66% and profits tripling. Analysts remain bullish, maintaining an average “buy” rating. The stock is up 13.7% year to date.

Looking Ahead

The AI sector remains highly dynamic, with shifting competitive landscapes, earnings surprises, and emerging disruptors shaping the market. Nvidia faces growing pressure from rivals like DeepSeek, while Palantir’s rally raises questions about its long-term momentum. AMD’s earnings were strong, but investor sentiment remains cautious. Meanwhile, AI-driven companies like Tempus AI and AppLovin are proving that innovation isn’t limited to the industry’s biggest players.

AI is evolving rapidly, and today’s winners may not be tomorrow’s leaders. Analysts are closely watching companies that demonstrate strong fundamentals, innovative AI adoption, and scalable business models to stay ahead in this fast changing landscape.

_{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.}

TOP AI STOCKS

TOP AI ETFs

AI STOCKS & ETFs NEWS 

AI Markets were deceived to believe In DeepSeek’s low training costs - Wccftech - They are actually 400 times higher than The reported figure.

Rise of AI stocks: Which companies are leading the market? - Analytics Insight - From NVIDIA & Microsoft to Tesla & Meta, AI is transforming industries and driving stock market gains.

Tesla’s AI revolution: Unveiling the future of financial markets - Lanoticiadigital - Tesla is pioneering the integration of AI in stock market trading, revolutionising trading dynamics.

Is the DeepSeek drama a gamechanger for the AI trade? - JPMorgan - From hyperscaler, data centres to cross sectors beneficiaries.

Google shares drop as much as 9% on revenue miss, soaring AI investments - CNBC - The company also reported disappointing cloud revenue at $11.96 billion during the quarter, compared to $12.19 billion expected by Wall Street.

AI STARTUPS

Four Chinese AI startups to watch beyond DeepSeek - MIT - These companies are all in a position to compete both within China and beyond.

European AI startups raised $8 billion in 2024 - TechCrunch - In 2024 alone, AI companies represented around 20% of all VC funding in the region.

VC investors take leading role in guiding startups through AI disruption -  Business Standard - From advising on strategic integrations to connecting with top tier AI talent, VCs are offering more than just capital.

AI TRENDS

Goldman Sachs starts process of replacing bankers with AI - The Business Standard - Goldman Sachs has announced its "GS AI assistant" has begun to roll out to around 10,000 employees as part of their long term push to introduce AI employees.

Gartner top 10 strategic technology trends for 2025 - Gartner - Each trending technology represents powerful new tools to vanquish productivity, security and innovation obstacles.

AI in cybersecurity market growth accelerates, 23.6% adoption rate expected by 2032 - Newswires - The AI in the cybersecurity market grows due to rising demand for advanced security, increasing cyber attacks across industries, and digitalisation in security.

OTHER

Superagency in the workplace: Empowering people to unlock AI’s full potential - McKinsey Digital - Almost all companies invest in AI, but just 1 percent believe they are at maturity.

Media planning should be automated, not manual: Sir Martin Sorrell - Brandequity - As AI takes over more routine work, it will allow us to focus on the more creative and strategic aspects of marketing, he said.

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_{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.}