3 Top Artificial Intelligence Stocks to Buy Right Now
The artificial intelligence (AI) revolution has transformed the investment landscape since 2023, and the momentum shows no signs of slowing. While many investors worry about missing out on the AI boom, several high-quality companies still present compelling opportunities. Among them, Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing (NYSE: TSM), and ASML (NASDAQ: ASML) stand out as top-tier AI stocks with significant growth potential.
What makes these three companies exceptional? They form the backbone of the AI value chain, supplying the critical infrastructure needed to power AI advancements. Rather than betting on a single AI winner, investing in these key enablers ensures exposure to the broader AI ecosystem.
Why These Three AI Stocks Are Must-Buys
1. ASML: The Monopoly Behind AI Chip Manufacturing
ASML holds a technological monopoly in extreme ultraviolet (EUV) lithography machines, which are essential for producing the most advanced semiconductor chips. No other company can manufacture these machines, making ASML indispensable in the AI chip supply chain.
- Key Advantage: Every major chipmaker, including TSMC and Intel, relies on ASML’s machines.
- Growth Catalyst: Rising demand for high-performance AI chips means more orders for ASML’s cutting-edge equipment.
- Valuation Opportunity: Despite export restrictions impacting its China business, ASML trades at an attractive valuation compared to historical levels, presenting a buying opportunity.
2. Taiwan Semiconductor Manufacturing (TSMC): The Foundry Powering AI Chips
TSMC is the world’s largest and most advanced semiconductor foundry, producing chips for tech giants like Nvidia, Apple, and AMD.
- Key Advantage: TSMC’s manufacturing dominance ensures it remains the go-to supplier for AI chip production.
- Growth Catalyst: AI-driven demand for high-performance computing (HPC) chips is accelerating TSMC’s revenue growth (up 31% YoY in recent quarters).
- Undervalued Stock: Trading at 21.2x forward earnings, TSMC is cheaper than the S&P 500 (22.1x), making it a compelling buy.
3. Nvidia: The GPU Leader Fueling AI Innovation
Nvidia’s graphics processing units (GPUs) are the gold standard for AI training and inference, powering data centers worldwide.
- Key Advantage: Nvidia commands over 90% market share in data center GPUs.
- Growth Catalyst: AI hyperscalers (like Microsoft, Google, and Meta) are investing billions in Nvidia’s GPUs to build AI infrastructure.
- Strong Financials: Revenue surged 69% YoY in its latest quarter, justifying its premium valuation (trading at a higher P/E than peers).
Why This Trio Is a Winning AI Investment Strategy
Instead of picking individual AI software winners, investing in ASML, TSMC, and Nvidia provides exposure to the entire AI hardware supply chain:
- ASML makes the machines needed to produce chips.
- TSMC manufactures the chips using ASML’s technology.
- Nvidia designs and assembles the GPUs that run AI models.
No matter which AI company dominates in software (OpenAI, Google, Meta, etc.), these three companies will benefit from the underlying demand for AI hardware.
Future Growth Potential
Despite strong past performance, these stocks still have room to grow:
- ASML’s stock is undervalued compared to its historical P/E ratio.
- TSMC trades at a discount to the broader market despite its critical role in AI.
- Nvidia’s rapid revenue growth supports its premium valuation.
Final Verdict: Buy and Hold for the Long Term
Investing in ASML, TSMC, and Nvidia is a strategic way to capitalize on the AI boom without betting on a single winner. These companies provide the essential infrastructure for AI development, ensuring sustained demand regardless of which AI applications dominate the market.
For investors seeking long-term AI exposure, this trio represents a balanced, high-growth opportunity in the evolving tech landscape.