AI Stocks: Future Outlook

Since OpenAI's GPT-4 was released, numerous stocks have seen gains due to AI. A forecast by Grand View Research predicts that the AI sector will experience a 32% compound annual growth rate (CAGR) through 2033. The Motley Fool analysts provide insight into where these AI stocks might be headed.

Nvidia (NVDA)

Jake Lerch believes Nvidia is the primary benefactor of the AI revolution. Nvidia has become the world's largest company by market capitalization in a short time. The future of Nvidia depends on the AI ecosystem and its role within. The stock will rise if AI thrives, but it will fall if AI investment declines.

Spending on AI infrastructure and the return on investment (ROI) for companies are legitimate concerns. Companies like Meta Platforms, Tesla, Microsoft, Amazon, and Alphabet are investing heavily in AI infrastructure, mainly Nvidia's GPUs. Currently, the returns seem promising, as increasing investments suggest better-than-expected ROIs. While competitors will emerge, Nvidia is expected to generate $206 billion in revenue for the fiscal year ending Jan. 27, 2026, and nearly $275 billion in the following 12 months. Thus, competition isn't expected to impact Nvidia's growth significantly in the next 18 months. AI investment is robust, indicating substantial benefits from AI spending, and Nvidia's competitors aren't expected to challenge its sales growth soon. Nvidia is an AI stock superstar.

Palantir Technologies (PLTR)

According to Will Healy, Palantir Technologies has utilized AI since its beginning. Its Artificial Intelligence Platform (AIP) has boosted capabilities, leading to productivity gains for its customers. Palantir's stock has increased by approximately 370% over the past year. However, the company's financials raise questions about the stock's near-term direction. Palantir's net income for the first half of 2025 was $541 million, representing a 126% yearly increase, but this fell short of the stock price's gains, leading to high valuations. Its price-to-sales (P/S) ratio of 131 is much higher than the S&P 500's average of 3.4.

It is possible for the stock to continue to increase. Given the high valuation, any negative news could cause a sell-off, which would make buying the stock at the current price risky. Investors might want to avoid investing new funds into Palantir, and those with low-risk tolerance might want to consider selling.

Apple (AAPL)

Justin Pope notes that Apple has received criticism for its AI iOS feature rollout, Apple Intelligence. With over 2.35 billion active iOS devices globally, bringing AI to Apple users seemed promising. However, Apple has faced challenges in releasing first-party AI features and has delayed the launch of its upgraded Siri to 2026.

Despite AI struggles, Apple continues to launch quality hardware products. The company recently released the iPhone 17, 17 Pro, Pro Max, and the slim-design iPhone Air. T-Mobile's CEO mentioned that iPhone sales are at an all-time high, and industry experts noted strong demand for the new lineup. While Apple needs to deliver compelling AI features, its hardware products remain strong. This gives Apple time to improve its AI and makes the stock attractive for investors looking for AI upside while sticking with a blue-chip stock.