2 Unstoppable Artificial Intelligence (AI) Stocks to Buy in April and 1 to Avoid
The AI leaders mentioned likely have strong advantages over their competitors in the industry. The Wall Street darling may be facing challenges that could impact its performance in the market. Investors should carefully evaluate the risks and potential rewards associated with investing in these companies. It's essential to consider the long-term outlook and competitive positioning of each company before making any investment decisions. Conducting thorough research and staying informed about market trends can help investors make more informed choices.
Dating back more than three decades, Wall Street seemingly always has a next-big-thing trend or innovation to captivate the attention of investors. For the last two-plus years, nothing has been bigger than the evolution of artificial intelligence (AI). With AI, software and systems are given the ability to reason, act, and evolve on their own. This capacity to reason and act autonomously gives this technology broad-based utility in most industries around the globe. It's precisely why the analysts at PwC are forecasting a $15.7 trillion addressable market for AI by the turn of the decade.
Unstoppable AI stock No. 1 to buy with confidence in April: Alphabet
The first artificial intelligence stock that makes for a sensational buy entering the second quarter of 2025 is none other than Google parent Alphabet (GOOGL 1.60%) (GOOG 1.74%). While there have been some concerns about slowing U.S. economic growth and the possibility of Donald Trump's administration clamping down on big tech stocks, Alphabet's competitive moat and valuation are simply too enticing to ignore.
Google has accounted for between an 89% to 93% share of monthly worldwide internet search dating back more than 10 years. Having a near-monopoly on internet search has businesses lining up to pay a premium to get their message(s) in front of users. Alphabet is going to benefit from the nonlinearity of economic cycles. This is to say that recessions are historically short-lived while economic expansions stick around for years. Ad-driven operating models thrive on this disparity.
The real excitement for Alphabet is its incorporation of generative AI solutions into Google Cloud, which is currently the third-largest cloud infrastructure service provider by spend in the world. Google Cloud became recurringly profitable in 2023, and the addition of AI solutions should only serve to increase the operating cash flow coming from this considerably higher-margin segment.
Unstoppable AI stock No. 2 to buy hand over fist in April: Meta Platforms
A second unstoppable artificial intelligence stock that's begging to be bought by opportunistic investors in April is social media titan Meta Platforms (META 1.73%). Meta's foundational catalyst is advertising. The company's family of apps lured an average of 3.35 billion daily active people to its sites in the month of December. With no other company offering businesses access to as many users, Meta is usually able to command premium ad-pricing power.
Meta Platforms is typically going to ebb-and-flow with the U.S. and/or global economy. Nearly 98% of its $164.5 billion in net sales last year can be traced back to advertising, which means multiyear expansions for the U.S. and global economy should fuel ad spending. However, the addition of AI has the potential to supercharge Meta's revenue and profits.
The AI darling investors should avoid in April: Nvidia
Unfortunately, not all artificial intelligence stocks are worth buying at this point in the development cycle. Despite its near-parabolic move higher since 2023 began, the AI darling that should be avoided by investors is semiconductor kingpin Nvidia (NVDA 1.63%). Nvidia has a near-monopoly on AI-data center GPU market share but faces increasing competition and potential overvaluation concerns.
Competition is ramping up from all angles, with many of Nvidia's top customers by net sales internally developing AI-GPUs to use in their high-compute data centers. These chips may lack Nvidia's computing speeds but offer a more cost-effective solution. Nvidia's heavy reliance on its data-center segment makes it vulnerable to any potential bursting of the AI bubble.
Nvidia's valuation is also worrisome, with a price-to-sales ratio that has been historically high, raising concerns about a possible bubble in the stock price.