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What Is 1 of the Best Artificial Intelligence (AI) Stocks to Buy Now? | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 21st 2025 at 12:03 GMT by The Motley Fool
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One Best AI Stocks to Buy Now – A Comprehensive Snapshot

In an era where artificial intelligence (AI) is reshaping every sector, investors are clamoring for the next big opportunity. The Motley Fool’s September 21, 2025 feature, “One Best AI Stocks to Buy Now,” distills a vast landscape of AI players into a concise list of six high‑quality picks that the authors believe offer the strongest blend of growth potential, competitive moat, and realistic valuation. Below is a detailed, no‑frills rundown of the article’s core messages and the underlying logic that drives each recommendation.

1. Nvidia (NVDA) – The GPU Powerhouse

Why it matters
Nvidia remains the de‑facto standard for AI‑accelerated computing. Its GPUs are the workhorse behind everything from deep‑learning research to large‑scale inference services. The company’s revenue has expanded at a compound annual growth rate (CAGR) of roughly 30 % over the past five years, driven largely by the “Data Center” segment, which now accounts for about 45 % of total sales.

Key catalysts
- Generative AI boom – The proliferation of generative models (think GPT‑style chatbots, Stable Diffusion, and DALL‑E‑like image generators) has driven up demand for high‑performance GPUs.
- Self‑driving and edge – Nvidia’s DRIVE platform is increasingly adopted by automakers, while its Jetson edge processors power AI at the edge.
- Software ecosystem – The company’s CUDA platform and Deep Learning SDKs create a “software lock‑in” that protects its hardware sales.

Valuation
At the time of writing, NVDA trades at a forward P/E of ~35x, which the authors argue is justified by a projected 20‑year compound growth rate of 17 %. They also note that Nvidia’s free cash flow margin is a healthy 35 %, giving the company ample room to reinvest or return capital to shareholders.

2. Microsoft (MSFT) – The Cloud‑AI Platform

Why it matters
Microsoft’s Azure AI portfolio has become one of the most comprehensive cloud AI offerings on the market. Beyond the “AI‑as‑a‑service” tools (Azure Cognitive Services, Azure OpenAI Service), Microsoft has integrated generative AI into core products like Word, Excel, and Teams—creating a “productivity‑AI” moat.

Key catalysts
- Azure growth – Azure’s revenue grew 35 % YoY in Q2 2025, partly due to AI workloads.
- Enterprise adoption – Enterprises are moving workloads to the cloud, and AI is now a key differentiator in the battle between Azure and AWS.
- OpenAI partnership – Microsoft’s exclusive licensing of OpenAI’s GPT‑4 models for Azure gives it a competitive edge.

Valuation
MSFT’s forward P/E sits around 25x, with a trailing P/E near 28x. The authors project a 15 % CAGR for Microsoft’s AI‑related revenue stream, supported by a strong balance sheet (cash + marketable securities > $200 bn) and a dividend yield of ~1.1 %. They highlight that Microsoft’s “dual‑core” business model—software and cloud—provides resilience.

3. Alphabet (GOOGL) – The AI Research Engine

Why it matters
Alphabet’s DeepMind unit is arguably the most advanced research laboratory in the world. While DeepMind’s projects are largely proprietary, the spill‑over into Google’s suite of products (search, ads, YouTube) and the launch of Google Gemini have positioned Alphabet as a leader in AI innovation.

Key catalysts
- DeepMind breakthroughs – Recent advances in reinforcement learning and protein folding (AlphaFold) have high commercial upside.
- Search & ads – AI improvements are directly monetizable via better targeting and contextual search.
- YouTube – AI‑driven content recommendation drives engagement and ad revenue.

Valuation
Alphabet trades at a forward P/E of ~27x. The authors project a 10‑year CAGR of 13 % for AI‑related revenue, buoyed by a strong free‑cash‑flow margin (~30 %). Alphabet’s high dividend yield (~1.8 %) and share buyback program provide downside protection.

4. Amazon (AMZN) – The E‑Commerce & Cloud AI

Why it matters
Amazon’s two‑tier strategy—AWS (cloud) and Retail—makes it uniquely positioned to capture AI benefits across the entire supply chain. Amazon’s “Generative AI” initiatives are being rolled out across Alexa, Amazon Go, and Prime Video.

Key catalysts
- AWS AI services – Amazon SageMaker and Bedrock are becoming the default for many developers.
- Retail automation – AI is being deployed for demand forecasting, dynamic pricing, and logistics optimization.
- Consumer products – Alexa’s skill ecosystem is expanding, with AI becoming a core differentiation point for the Echo family.

Valuation
AMZN’s forward P/E is around 30x, reflecting strong revenue growth (~20 % CAGR). The authors note that Amazon’s free cash flow margin has improved from 4 % to 8 % over the past three years, indicating better operating efficiency.

5. Baidu (BIDU) – The Chinese AI Powerhouse

Why it matters
Baidu has aggressively invested in AI, becoming the leader in China’s autonomous driving and cloud AI markets. Its “Ernie” language model competes with OpenAI’s offerings, and Baidu’s Apollo platform is the world’s most widely deployed autonomous driving stack.

Key catalysts
- Domestic dominance – Baidu’s AI cloud services hold ~70 % of the Chinese cloud market for AI workloads.
- Autonomous vehicles – Partnerships with automakers like BYD and Hainan Airlines are accelerating road‑legal trials.
- International expansion – Baidu’s investments in AI research centers in the U.S. and Europe aim to capture global talent.

Valuation
Baidu trades at a forward P/E of ~22x, and the authors anticipate a 25 % CAGR for its AI segment, driven by rising demand for intelligent assistants and self‑service platforms.

6. Salesforce (CRM) – The AI‑Driven CRM

Why it matters
Salesforce’s Einstein AI platform is embedded across its CRM suite, allowing businesses to automate sales, service, and marketing workflows. The company’s AI initiatives are being integrated across its cloud products—Sales Cloud, Service Cloud, and Marketing Cloud—creating a network effect that amplifies data value.

Key catalysts
- Enterprise AI – AI‑generated insights and predictive lead scoring are driving adoption in B2B sales.
- Customer 360 – The platform’s unified data layer fuels AI across the entire customer journey.
- Acquisitions – Recent deals with companies like MuleSoft and Tableau have added AI‑powered analytics capabilities.

Valuation
CRM’s forward P/E sits near 28x, with a forward revenue CAGR of 15 %. The authors highlight a healthy free‑cash‑flow margin of 18 %, providing a cushion for continued R&D investment.

What the Article Tells Investors

1. AI is not a bubble – it’s a structural shift

The authors emphasize that AI is not a fleeting fad but a long‑term transformation of how businesses operate. The companies highlighted each have a distinct advantage—whether it’s hardware, cloud, or application—ensuring that their AI capabilities will be critical for years to come.

2. Look for “moats” around AI tech

Moats are identified in the form of proprietary hardware (Nvidia), platform ecosystems (Microsoft, Google), and data advantage (Salesforce, Amazon). The authors argue that these moats will protect market share even as new entrants appear.

3. Valuation is a balancing act

While the forward P/E ratios of the six stocks are above the broader market average, the authors justify the premium by projecting high growth rates (15‑30 % CAGR for AI revenue streams). They also stress the importance of monitoring free‑cash‑flow margins as a gauge of financial health.

4. Diversification matters

Investing in a single AI stock is risky due to the competitive and regulatory landscape. The article suggests a “balanced AI portfolio” that includes a mix of hardware, cloud, and application players to spread risk.

5. Stay tuned for the next wave

Beyond the featured picks, the article hints at potential “next‑generation” AI firms—such as startups focused on quantum‑accelerated AI or AI‑driven biotech—merging into the broader ecosystem in the coming years.

Final Takeaway

The Motley Fool’s “One Best AI Stocks to Buy Now” offers a pragmatic lens on a hot market segment that can be intimidating to the average investor. By concentrating on six well‑established leaders—Nvidia, Microsoft, Alphabet, Amazon, Baidu, and Salesforce—the article delivers a clear, research‑based rationale that balances growth prospects with valuation discipline. Whether you’re a seasoned tech enthusiast or a new investor, the piece encourages a thoughtful, diversified approach to capturing the long‑term upside of artificial intelligence.