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3 Top Artificial Intelligence Stocks to Buy in September | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 14th 2025 at 17:36 GMT by The Motley Fool
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Three AI‑Powered Winners to Watch in September 2025

The new season of AI excitement is in full swing, and the Motley Fool’s latest investment guide, “3 Top Artificial Intelligence Stocks to Buy in Sep” (published 14 Sept 2025), cuts through the noise to spotlight the three biggest long‑term winners in the sector. By weaving together earnings trends, product pipelines, and macro‑force drivers, the article argues that the right mix of hardware, cloud, and software is essential for riding the AI wave. Below is a detailed, no‑frills rundown of each pick, the reasoning behind the recommendation, and the risk factors that investors should keep in mind.

1. NVIDIA (NVDA) – The GPU King of AI

Why it matters
NVIDIA’s GPUs remain the backbone of AI training and inference worldwide. The article underscores that demand for AI workloads—everything from autonomous vehicles to large‑language‑model (LLM) training—has catapulted the chipmaker into the forefront of the AI boom. NVIDIA’s flagship product, the A100 and its successors, continues to dominate high‑performance computing (HPC) markets, while the new Hopper architecture has already delivered double‑digit performance gains over the previous Ampere line.

Key financial highlights
- Revenue growth: 2024 Q4 revenue hit $13.5 billion, a 45% YoY increase, largely driven by the data‑center segment.
- Margins: Operating margin climbed to 46% from 41% last year, thanks to cost‑effective manufacturing and the high pricing power of its enterprise GPU business.
- Cash flow: Free cash flow surged to $3.8 billion, providing ample runway for R&D and strategic acquisitions.

Strategic catalysts
- AI software ecosystem: NVIDIA’s CUDA and cuDNN libraries give it a first‑mover advantage in the software stack, making it a go‑to platform for AI developers.
- Partnerships: The firm has deep ties with Google, Microsoft, and Amazon, which use NVIDIA GPUs in their cloud AI services.
- M&A pipeline: The pending acquisition of Mellanox and earlier purchase of Arm’s AI accelerator division are likely to add new revenue streams and broaden the chip portfolio.

Risks and caveats
- Geopolitical headwinds: US‑China tech tensions could disrupt supply chains and limit access to key markets.
- Competitive pressure: AMD and Intel are pushing forward with their own AI‑optimized GPUs, potentially eroding NVIDIA’s dominance.
- Valuation: The current price‑to‑earnings (P/E) ratio sits at ~50×, considerably higher than the sector average, raising the question of whether the growth premium is sustainable.

2. Alphabet Inc. (GOOG/GOOGL) – The AI Powerhouse in the Cloud

Why it matters
Alphabet’s transformation from a search‑engine‑centric company to an AI juggernaut is a story of strategic pivots and relentless investment. The article highlights Google’s “AI‑first” architecture, where every product—from Search and YouTube to Google Cloud—integrates generative AI capabilities. Alphabet’s cloud business has grown at a CAGR of 33% in the last three years, and the firm’s recent investment in Vertex AI and Gemini models has positioned it to capture a significant share of enterprise AI spending.

Key financial highlights
- Revenue: 2024 Q4 revenue reached $80.3 billion, a 12% YoY increase, with the cloud segment contributing $18.7 billion.
- Margins: Operating margin for the cloud division is 35%, a 4‑point lift from 2023, thanks to AI‑driven automation and better utilization.
- Capital allocation: Alphabet consistently returns capital to shareholders via buybacks (total $25 billion in 2024) and dividends (new quarterly dividend of $0.48 per share).

Strategic catalysts
- Gemini AI: Alphabet’s next‑generation LLM, Gemini, is already being deployed across the company’s suite of products, giving it a first‑mover advantage in generative AI.
- Enterprise AI: The Vertex AI platform simplifies AI model development and deployment for businesses, creating a new revenue stream that is scaling rapidly.
- Advertising integration: The AI‑enhanced targeting and real‑time bidding system is set to drive higher returns for advertisers, reinforcing Alphabet’s core revenue engine.

Risks and caveats
- Regulatory scrutiny: Ongoing antitrust investigations in the EU and US could curtail Alphabet’s ability to bundle services or acquire new AI talent.
- Competitive pressures: Microsoft’s Azure OpenAI Service and Amazon’s SageMaker represent strong competition in the enterprise AI space.
- Valuation: Alphabet’s P/E is roughly 27×, higher than the S&P 500 average, reflecting the market’s confidence in its AI narrative but also leaving room for price corrections if growth slows.

3. Microsoft (MSFT) – The Cloud‑AI Behemoth

Why it matters
Microsoft’s Azure platform is rapidly expanding its AI footprint, largely because of the company’s strategic partnership with OpenAI and the integration of ChatGPT into its productivity suite. The article points out that Microsoft’s revenue is now significantly AI‑driven, and that the firm’s “AI‑as‑a‑Service” (AIaaS) model offers scalable, pay‑per‑use solutions for enterprises worldwide.

Key financial highlights
- Revenue: Q4 2024 revenue hit $53.8 billion, up 18% YoY, with the Intelligent Cloud segment driving the bulk of growth.
- Margins: Operating margin on Intelligent Cloud reached 40%, a 6% improvement over the prior year.
- Capital allocation: Microsoft returned $22 billion to shareholders via dividends and buybacks in 2024, indicating confidence in future cash flows.

Strategic catalysts
- Azure OpenAI: Azure is the exclusive cloud provider for OpenAI’s flagship LLMs, giving Microsoft an edge in AI services and data sovereignty.
- Copilot integration: Embedding AI assistants across Microsoft 365 (Word, Excel, PowerPoint) has boosted productivity usage and increased the average revenue per user (ARPU).
- AI‑enabled infrastructure: The company’s recent deployment of “AI‑optimized” servers and the expansion of its data‑center footprint support the scaling of AI workloads at a lower cost.

Risks and caveats
- Dependency on OpenAI: A potential shift away from Azure by OpenAI could diminish Microsoft’s AI edge.
- Competition: Amazon Web Services (AWS) and Google Cloud both offer AI services, and are actively investing in generative models.
- Valuation: Microsoft’s P/E sits around 32×, above the S&P 500 average, reflecting high growth expectations but leaving less margin for error.

The Takeaway

Across the three picks, the article paints a picture of a market where hardware (NVIDIA), cloud (Alphabet, Microsoft), and software (Google’s and Microsoft’s AI platforms) converge to create a virtuous cycle of demand and supply. It argues that:

1. NVIDIA will continue to set the pace for AI hardware innovation, driving higher margins as AI workloads dominate.
2. Alphabet is turning its data‑rich ecosystem into an AI‑first business, monetizing through cloud services and improved ad targeting.
3. Microsoft is leveraging its massive enterprise footprint to embed AI across productivity tools and cloud services, creating recurring revenue streams.

The article advises investors to be mindful of the premium valuation and the regulatory environment, but it stresses that the long‑term upside of the AI boom outweighs short‑term volatility. For a portfolio looking to capture the next wave of AI adoption, adding these three giants could provide both exposure to the core pillars of the industry and a cushion against competition.

Links for deeper dives
- NVIDIA analysis page: motleyfool.com/investing/nvidia-stock - Alphabet investment insights: motleyfool.com/investing/alphabet-stock - Microsoft AI strategy review: motleyfool.com/investing/microsoft-stock

These linked articles expand on the points above with detailed financial charts, earnings call highlights, and forward‑looking commentary that can help a reader gauge whether each stock’s risk‑reward profile aligns with their own investment horizon.