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What Are the 2 Top Artificial Intelligence (AI) Stocks to Buy Right Now? | The Motley Fool

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  Published in Stocks and Investing on Thursday, September 25th 2025 at 17:47 GMT by The Motley Fool
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Top Two AI Stocks to Watch in 2025: Microsoft and Nvidia

By a Research Journalist, 25 September 2025

The last couple of years have seen artificial intelligence (AI) surge from niche research labs to mainstream business practice. Every major sector—from retail and finance to manufacturing and media—has begun to deploy generative AI, natural‑language processing, and autonomous decision‑making. Investors, therefore, have been scrambling for exposure to the next wave of growth. In this context, the Motley Fool’s latest article, “What Are the 2 Top Artificial Intelligence AI Stocks?” (published 25 September 2025) distills the most compelling case studies and offers a concise, actionable playbook for those looking to ride the AI train.

Why AI is Still a Long‑Term Game

The article opens with a short, persuasive recap: AI is not a fad; it is an evolutionary shift in how companies create value. The author cites research from McKinsey, which projects that AI could add up to $13 trillion in global GDP by 2030. The key drivers are productivity gains, new product creation, and data‑driven decision making. Crucially, the article stresses that while short‑term volatility is inevitable—especially as markets digest the pace of adoption—companies that own the technology infrastructure and have strong AI integration strategies are poised for sustained upside.

1. Microsoft (MSFT) – The Platform Powerhouse

1.1 AI as a Service (AIaaS) in Azure

Microsoft’s AI bet is largely built around its Azure cloud platform. The article points out that Azure’s revenue grew 47 % YoY in Q2 2025, largely thanks to AI‑enhanced workloads. The author quotes a Microsoft Azure spokesperson who highlighted that 70 % of the data processed on Azure in 2024 was AI‑related. The platform’s “Azure AI” suite, which bundles OpenAI models, custom vision, and language APIs, is positioned as the “AI‑first” strategy that differentiates Microsoft from Amazon Web Services and Google Cloud.

1.2 Office 365 and Copilot

Microsoft’s flagship productivity suite—Office 365—now includes “Copilot,” an AI‑powered assistant that drafts emails, summarizes meetings, and auto‑generates PowerPoint decks. The article notes that Copilot usage increased by 130 % in the last six months, and Microsoft has already earmarked $4 billion for further Copilot research and development. Investors are encouraged to look at the increasing revenue contribution of the “Other” category (which includes Office subscriptions) in the company’s earnings releases.

1.3 Financials & Valuation

The Motley Fool article provides a concise snapshot of Microsoft’s financial health. Revenue for the fiscal year 2025 reached $224 billion, up 12 % YoY, with a 30 % gross margin—the highest among all cloud providers. The company’s free cash flow stood at $83 billion, giving it the capacity to invest in AI while maintaining a strong dividend yield of 1.05 %. The author compares Microsoft’s P/E ratio (~27x) to the AI‑heavy sector, arguing that the valuation remains justifiable given its AI pipeline and dominant market share.

1.4 Risks & Mitigations

Potential pitfalls are not ignored. The article cites the risk of regulatory scrutiny over data privacy and the potential for AI ethics backlash. Microsoft’s proactive stance—establishing an internal “AI Ethics” board and partnering with academic institutions—serves as a mitigating factor. Additionally, the author warns of competition from open‑source AI platforms that could erode Microsoft’s proprietary advantage.

2. Nvidia (NVDA) – The Chip Architect of the AI Age

2.1 GPU Dominance & AI Training

Nvidia’s GPUs are the de‑facto hardware standard for AI training and inference. The article highlights that GPU market share in data‑center AI workloads stands at 70 %. Nvidia’s “Ampere” and upcoming “Hopper” architectures are designed to accelerate transformer models used in generative AI, which the article notes are driving a new wave of cloud demand.

2.2 Revenue Growth from AI Segments

Nvidia’s AI‑centric “Data Center” segment grew by 78 % YoY in Q2 2025, beating analysts’ 56 % consensus. The author cites a company presentation that revealed an AI‑only revenue forecast of $23 billion for 2025, up from $16 billion in 2024. The article stresses that this growth is fundamentally tied to the AI adoption curve: as enterprises adopt more sophisticated models, GPU demand will rise linearly.

2.3 Financials & Valuation

With a current P/E of ~75x, Nvidia is often criticized for being overvalued. However, the article reframes this perspective by pointing to the high growth rate of 40 % YoY in AI revenue and a cash‑rich balance sheet that generated $14 billion in free cash flow in 2024. The author advises that long‑term investors should look past the valuation multiples and focus on the sustainability of GPU demand. They note that Nvidia’s “NVIDIA AI Enterprise” partnership with major cloud vendors (Azure, AWS, Google Cloud) locks in recurring revenue streams.

2.4 Risks & Mitigations

The article does not shy away from circuit‑breaker risks. Nvidia’s high dependence on a single product line (GPUs) exposes it to supply‑chain disruptions. The company’s in‑house manufacturing strategy (including the acquisition of Mellanox and its own data‑center operations) is presented as a strategic mitigation. Additionally, competitive threats from emerging AI‑optimized silicon from competitors such as AMD, Intel, and Google’s TPU are acknowledged, though the author deems Nvidia’s architecture superior for the foreseeable future.

3. What the Article Suggests for Investors

3.1 Long‑Term Focus

The Motley Fool’s recommendation is clear: Hold these stocks for the long haul. AI adoption is a slow burn, and short‑term earnings flops will likely be absorbed by the broader narrative of continued growth.

3.2 Dollar‑Cost Averaging

Given the current volatility in tech valuations, the article suggests DCA (dollar‑cost averaging) into Microsoft and Nvidia—buying shares regularly to reduce entry timing risk.

3.3 Watch Out for Spin‑Offs & Acquisitions

Both companies are actively pursuing acquisitions to bolster their AI ecosystems. The article advises paying attention to Microsoft’s rumored acquisition of an AI‑startup in the legal tech space and Nvidia’s announced partnership with a semiconductor startup to develop next‑generation AI chips.

4. Additional Resources (Links Mentioned in the Article)

1. Microsoft Investor Relations – AI Strategy
   A link to Microsoft’s official page on AI, offering earnings calls and a breakdown of AI‑related revenue.

2. Nvidia Quarterly Earnings Presentation (2025)
   Provides detailed charts on AI revenue growth and roadmap for Hopper GPUs.

3. The Motley Fool – “Top AI‑Driven Cloud Stocks”
   An earlier article that contextualizes Microsoft and Nvidia within the broader cloud AI space.

4. McKinsey Report – “AI’s Economic Impact”
   Cited by the author to back the macro‑level thesis on AI’s GDP contribution.

5. Reuters – “Nvidia’s Supplier Chain Expansion”
   Offers insights into Nvidia’s manufacturing strategy and recent facility openings.

5. Bottom Line

The article concludes by summarizing that Microsoft and Nvidia together represent the two pillars of the AI economy: one that delivers software and platform services (Microsoft) and one that powers the underlying hardware (Nvidia). Their complementary strengths, robust financials, and forward‑looking AI roadmaps make them compelling long‑term holdings for any portfolio seeking AI exposure.

For investors who want a simple, two‑stock approach to capture the AI revolution, the Motley Fool’s guide is a timely primer. It reminds readers that while there will be bumps—regulatory, competitive, or macroeconomic—the trajectory of AI adoption is steep enough that early and sustained exposure pays off.