What's Next for These 3 Artificial Intelligence (AI) Stocks?

Key Points

• Will Nvidia remain as an AI stock superstar?

• Palantir’s AI-driven gains may not justify its stock price.

• Apple may be experiencing a strong iPhone cycle, with AI opportunities still ahead.

• 10 stocks we like better than Nvidia ›

As tech investors have observed, artificial intelligence (AI) propelled many stocks higher since the release of OpenAI's GPT-4. Thanks to the gains sparked by this technology, several individual stocks and the stock indexes reached record highs in recent trading sessions.

This has to many AI stocks setting new all-time highs. Also, Grand View Research forecasts a 32% compound annual growth rate (CAGR) in the AI sector through 2033, leading to questions about what comes next, especially for individual stocks in this sector. With that question in mind, three analysts from The Motley Fool share their insights on some of the most critical AI stocks and where they are likely to go from here.

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 »

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1. Nvidia will likely exceed $200 billion in sales this fiscal year

Jake Lerch (Nvidia): My choice is Nvidia (NASDAQ: NVDA). There's no doubt in my mind that Nvidia -- more than any other company -- has been the prime beneficiary of the AI revolution. After all, this is a company that, in just a few years, has risen to become the largest company by market capitalization in the world.

So, what are investors to make of Nvidia? What is the ceiling for the company? Or is there no ceiling at all?

Obviously, the answers to these questions revolve around the AI ecosystem and Nvidia's prime role within it. If the AI revolution continues to roll on, so will Nvidia. If AI investment slows or collapses, Nvidia's stock will tumble. Moreover, what if new competitors challenge Nvidia's enormous lead within the graphics processing unit (GPU) market?

First, there are legitimate concerns about the amount of spending on AI infrastructure -- and what return on investment (ROI) companies will get from it. Meta Platforms, Tesla, Microsoft, Amazon, Alphabet, and many others are investing billions in AI infrastructure -- much of it in the form of Nvidia's advanced GPUs. These companies each have their own unique vision for utilizing their AI resources and their own ROI expectations.

For the moment, there is no sign that their ROI isn't measuring up. Indeed, the escalating scale of the investments suggests that ROIs are even better than expected.

Second, it's true that competitors will eventually close the gap on Nvidia. That is the nature of capitalism. However, the question remains how long that process will take to play out. According to estimates compiled by Yahoo! Finance, Nvidia is expected to generate $206 billion in revenue for the fiscal year (the 12 months ending Jan. 27, 2026), and nearly $275 billion in the following 12 months.

So, competition will eventually emerge. Still, it is not expected to substantially impact Nvidia's growth over the next 18 months.

Nvidia remains the top dog in both the AI sector and the broader stock market. Overall, AI investment remains robust, suggesting that companies are reaping substantial benefits from their AI spending. Finally, Nvidia's competitors remain years off from fully challenging the company's strong sales growth. In short, Nvidia remains an AI stock superstar.

2. Investors must weigh company gains against stock growth in this stock

Will Healy (Palantir): Palantir Technologies (NASDAQ: PLTR) has been an AI company since its inception. The technology played a critical role in delivering analytical insights in the national security and commercial sectors.

More recently, the launch of its generative AI-based Artificial Intelligence Platform (AIP) undoubtedly supercharged these capabilities. Numerous customers from diverse enterprises reported eye-popping productivity gains. Amid such improvements, Palantir's stock is up by nearly 370% over the last year.

Unfortunately for bulls in this stock, its financials call into question the near-term direction of Palantir stock. In the first half of 2025, Palantir earned a net income attributable to common shareholders of $541 million, a 126% yearly gain.

While that is an impressive amount of growth by any measure, it fell short of the gains in the stock price. Consequently, Palantir reached stratospheric valuations. Even if investors can dismiss the 592 P/E ratio, its price-to-sales (P/S) ratio of 131 is far removed from the S&P 500's average sales multiple of 3.4.

Does this mean Palantir's stock is headed for a crash, or at least a pause? Not necessarily, as it is always possible that it will beat expectations or find some other factor that will propel the stock higher.

The problem with these valuations is that they price Palantir stock for perfection. That means any hint of negative news could trigger a massive sell-off, making it extremely risky to buy the stock at current prices.

Amid that possibility, investors should probably refrain from putting new money to work in Palantir. Additionally, if one's risk tolerance does not lend itself to owning such an expensive stock, they should consider selling.

3. Don't write off Apple as an AI powerhouse just yet

Justin Pope (Apple): Iconic electronics titan Apple (NASDAQ: AAPL) has faced considerable criticism for its lackluster rollout of AI iOS features it had dubbed Apple Intelligence.

It was supposed to be an easy layup -- there are over 2.35 billion active iOS devices worldwide. Successfully bringing AI to Apple users would have almost assured the company's place as a top AI company, where next-generation technology would further enhance its already sticky ecosystem.

Unfortunately, Apple dropped the ball. The company has struggled to ship first-party AI features and has since delayed its launch of an upgraded Siri, Apple's virtual personal assistant, to a 2026 release date. But don't write Apple off just yet. The company continues to specialize in bringing refined, quality hardware products to market, allowing its iOS ecosystem to shine.

Apple just launched its latest iPhone models: the 17, 17 Pro, and Pro Max, as well as a new, slim-design model, the iPhone Air. According to early indications, Apple may be in for a strong hardware cycle. The CEO of T-Mobile recently noted that iPhone sales are at an all-time high. Industry experts also pointed out strong demand for the new iPhone lineup.

While Apple must ultimately deliver a working and compelling slate of AI features for its devices, it's clear that Apple's core hardware products haven't lost their fastball. That should give the company time to figure out AI and keep the stock on the radar of any investor looking for some AI upside, but would rather stick with a blue-chip winner versus rolling the dice on unproven or speculative AI stocks.

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Jake Lerch has positions in Alphabet, Amazon, Nvidia, and Tesla. Justin Pope has no position in any of the stocks mentioned. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool recommends T-Mobile US and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.