3 No-Brainer AI Stocks to Buy in July

The year is halfway over, and artificial intelligence (AI) investing hasn't gone anywhere. Companies are sticking to their plan to spend a record amount on data centers, which are primarily used to power the ever-growing AI workloads.

There are several beneficiaries of this trend, but three of my favorites are Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Taiwan Semiconductor Manufacturing (NYSE: TSM).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

These stocks aren't new; they've been top AI stocks to buy for several years now. However, there's still plenty of growth left in the pipeline for these stocks to continue succeeding throughout the rest of 2025 and beyond. As a result, I believe these three are excellent stocks to consider purchasing right now.

Image source: Getty Images.

1. Nvidia

Nvidia's graphics processing units (GPUs) have trained and powered the vast majority of AI models to this point for a reason. The software supporting its GPUs and the GPU technology is second to none and has contributed to Nvidia achieving around a 90% market share in the data center GPU market.

Nvidia also envisions a future of AI factories filled with its GPUs, which means there is still a huge upside in the stock, despite it already being one of the most successful stocks of the past decade.

Despite its success, the stock isn't that expensive. It trades at 37 times forward earnings, but for most of the second half of last year, it traded at around 45 times forward earnings. This means there could still be quite a bit of juice left to squeeze out of Nvidia's stock over the next few months.

NVDA PE Ratio (Forward) data by YCharts

Nvidia is not only a solid buy now, but also an excellent long-term investment.

2. Broadcom

One company that's coming for Nvidia's market-share dominance is Broadcom. While it offers connectivity switches that are critical for data centers that integrate with Nvidia GPUs, Broadcom is also a partner in designing custom AI accelerators, which it calls XPUs.

XPUs can outperform GPUs when the task is set up properly, as they are specifically designed to handle a particular workload. Furthermore, using a chip designed in collaboration with Broadcom eliminates Nvidia and its substantial margins, making the price of using these devices more affordable than an Nvidia GPU.

Broadcom already has significant contracts to produce units like Google's Tensor Processing Units (TPUs). As more companies start to deploy AI and build up their inference capacity, Broadcom's XPUs could become a significant part of that solution, potentially driving growth in this portion of its business. Broadcom expects this division to produce between $60 billion and $90 billion in revenue by fiscal year 2027. Considering that AI revenue was $12.2 billion in FY 2024, this would be massive growth, making Broadcom an excellent stock to buy and hold.

3. Taiwan Semiconductor Manufacturing

Neither Broadcom nor Nvidia has the capability to fabricate its own chips, so they outsource that work to the worldwide leader in chip production: Taiwan Semiconductor. Known as TSMC, the company has industry-leading technology and best-in-class yields, making it a great partner, which is why nearly every major tech company sources its chips from TSMC.

It's also taking steps to expand its footprint in the U.S., investing $165 billion in its Arizona production facility. With companies like Nvidia touting that its highest-end Blackwell chips will be completely made in the U.S. by the end of the year, the fear surrounding TSMC's proximity to China is diminished.

Management also has unparalleled access to industry trends because chip orders are often placed years in advance. Over the next five years, management anticipates revenue growth at a nearly 20% compounded annual growth rate (CAGR).

That's impressive growth for multiple years, making TSMC a top stock to buy now and hold for the long term.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $939,655!*

Now, it’s worth noting Stock Advisor’s total average return is 1,045% — a market-crushing outperformance compared to 178% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Keithen Drury has positions in Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.