Top 5 AI Stocks for July

Artificial intelligence (AI) investing is still going strong in 2025. Record data center spending has been announced, and major tech companies are moving forward with their plans, even expanding them. This is good news for many companies and makes several of them excellent investments right now.

Here are five companies that look like excellent buys in the AI space, which can be divided into two main categories: infrastructure and cloud computing. Both are in a good position to profit from the high demand for AI right now, which is a key part of the investment criteria.

AI Infrastructure Investments

Companies that fall under the AI infrastructure investment category are Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Taiwan Semiconductor Manufacturing (NYSE: TSM). Their products are currently used for AI training and inference and are benefiting from significant AI spending.

Nvidia

Nvidia's graphics processing units (GPUs) have driven the AI revolution from the beginning. There is no real competition in this area; there are only alternatives to keep Nvidia from dominating the market. This is promising for the future, as more and more data centers are being built using Nvidia GPUs.

Broadcom

Broadcom may be able to replace Nvidia's GPUs with its custom AI accelerators, called XPUs. XPUs can be set up to perform better than GPUs if the workload is properly configured. By optimizing an XPU for a specific workload, Broadcom and its AI hyperscaler partners can create a more cost-effective and powerful computing device, though with less flexibility. AI hyperscalers are using more XPUs to train and run inference for AI models, but Nvidia GPUs are still central to many data centers because of their flexibility. There is plenty of room for both in the current AI race, and each has a promising future.

Taiwan Semiconductor Manufacturing

Both Broadcom and Nvidia use Taiwan Semiconductor (TSMC) chips in their devices. TSMC provides clients with advanced chip technology and excellent yields. As the demand for AI chips increases, so will the demand for TSMC. This growth is driving management's guidance for the next five years, which projects a compound annual growth rate (CAGR) of 45% for AI-related chips, with overall revenue expected to grow at a 20% CAGR. There is a high demand for AI hardware, and these three companies are well-positioned to take advantage of it.

Cloud Computing Investments

AI leaders like Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) are building data centers not only for their own AI use but also to rent out to others. Many companies may want to use AI, but they may not have the resources to build an advanced AI training facility. Also, they may not have a use case that needs to run all the time, which is needed to justify the cost. Instead, companies can choose to rent computing power from cloud computing providers like Amazon Web Services (AWS) or Google Cloud. Also, many companies are moving non-AI workloads to the cloud and using GPUs from providers like Nvidia to power them. This demand is helping the entire ecosystem, making stocks like Alphabet and Amazon good buys.

Grand View Research estimates that the entire cloud computing market will reach about $750 billion by 2024 and is expected to grow to $2.4 trillion by 2030. That's significant growth that every investor wants a part of, and owning Amazon and Alphabet is a good way to benefit from this trend.

The Motley Fool Stock Advisor team has identified what they believe are the 10 best stocks for investors to buy now, and Nvidia wasn’t one of them. The 10 stocks that made the list could produce significant returns. Stock Advisor’s total average return is 1,060%, compared to 180% for the S&P 500.