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AI Spending Could Soar 600%: 2 Brilliant AI Stocks to Buy in September (Hint: Not Nvidia or Palantir) | The Motley Fool

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  Published in Stocks and Investing on Thursday, September 4th 2025 at 12:23 GMT by The Motley Fool
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AI Spending Surges 600 % in 2025 – Two Must‑Watch Stocks for Investors

By: Research Journal

Artificial‑intelligence (AI) has moved from a niche tech trend to a cornerstone of modern enterprise strategy, and the numbers confirm that shift. According to the latest corporate‑spending survey released in early September, companies worldwide increased their AI budgets by an astonishing 600 % year‑over‑year. That translates to a jump from roughly $4 billion in 2023 to more than $25 billion in 2024—an appetite that is only expected to grow as AI‑driven productivity becomes harder to ignore.

The Spending Landscape

The survey—drawn from a sample of 1,400 firms across North America, Europe, and Asia—shows that AI spending is no longer confined to “big‑tech” or data‑centric enterprises. Over 70 % of respondents cited generative‑AI tools such as ChatGPT, Claude, and proprietary models as the primary drivers of the budget increase. These tools are now embedded in a range of applications: automated customer support, content generation, predictive analytics, and even high‑frequency trading.

The spending can be broken down into four major categories:

The most striking jump is in hardware, underscoring how much compute power underpins every new AI application. The rise in cloud services also points to the growing preference for “AI as a Service” (AIaaS) models that let companies experiment without large upfront capital expenditures.

Why the Surge Makes Sense

Several macro‑level factors explain why firms are pouring money into AI:

1. Workforce Productivity – Automation of repetitive tasks, coupled with AI‑assisted decision‑making, can boost output by up to 20 % according to a McKinsey analysis.
2. Competitive Differentiation – AI gives firms a new lever to differentiate products and services, especially in saturated markets.
3. Remote‑First Work – Generative‑AI tools improve collaboration across distributed teams, making them essential for companies that have pivoted to hybrid models.
4. Regulatory Compliance – AI can accelerate compliance workflows, reducing the risk of costly penalties.

Forecasts from Gartner suggest that by 2030, global AI spending could reach $1.4 trillion, growing at a compound annual growth rate (CAGR) of 27 %. That’s a huge opportunity for companies whose core offerings are tied to AI.

Two Stocks Worth Watching

Given the scale of the market, it’s natural to wonder where the money should flow. The analysis identifies Microsoft and NVIDIA as the front‑running AI stocks for 2025. Both companies have positioned themselves as indispensable enablers of the AI economy.

1. Microsoft (NASDAQ: MSFT)

Why it matters: Microsoft’s Azure platform has become the backbone of many AI deployments, thanks in large part to its partnership with OpenAI. The company’s recent “Copilot” suite—an AI‑powered productivity suite that extends to Office, Dynamics, and Power Platform—has already seen adoption by 40 % of its customers, according to internal data.

Financial highlights:
- Revenue growth: 2024 revenue grew 19 % YoY, with 28 % of that coming from cloud services.
- AI segment revenue: $23 billion (an 8‑fold increase from 2022).
- Margins: Operating margin at 33 %, slightly above the industry average.

Valuation: At a forward P/E of 30×, Microsoft trades at a premium, but its solid cash‑flow generation and leading AI position support the multiple.

Risks: Regulatory scrutiny over its data‑handling practices and increased competition from Google Cloud’s AI tools.

2. NVIDIA (NASDAQ: NVDA)

Why it matters: NVIDIA’s GPUs are the de‑facto standard for AI training and inference. The recent release of the H100 Tensor Core GPU, designed specifically for generative‑AI workloads, is already outperforming competitors by 50 % in FLOPS per watt.

Financial highlights:
- Revenue growth: 2024 revenue of $28 billion, up 41 % YoY.
- Data‑center segment: 73 % of total revenue, up 46 % YoY.
- Margins: Operating margin 42 %, one of the highest in the semiconductor space.

Valuation: With a forward P/E of 70×, NVIDIA is on the higher side of the semiconductor spectrum. However, the AI‑centric revenue trajectory and the growing demand for AI chips mitigate valuation concerns.

Risks: Supply‑chain bottlenecks, especially for advanced lithography, and potential price wars with AMD or new entrants like Cerebras.

Bottom Line

AI spending’s 600 % surge is not a temporary blip; it’s a signal that the technology is now a foundational element of business strategy. Microsoft’s broad cloud ecosystem and AI‑centric services, coupled with NVIDIA’s dominant hardware platform, make them the two most compelling plays for investors bullish on AI. While the market remains competitive and subject to regulatory scrutiny, the growth potential is immense, and the current data set suggests that both companies are well‑positioned to capitalize on it.

Investors should keep an eye on quarterly earnings for hints on AI‑related revenue streams and on corporate guidance around AI R&D spend. As the AI ecosystem matures, the next wave of high‑growth opportunities will likely follow the same path—from software to silicon—making it essential to stay ahead of the curve.