Prediction Markets Are Booming, but I'd Rather Bet on These 3 AI Stocks

The prediction markets are booming, with people able to "bet" on anything from sports to geopolitical event outcomes on these platforms. However, while these products are technically futures contracts that fall under the jurisdiction of the Commodity Futures Trading Commission, I wouldn't consider them a great investment vehicle.

Instead, I'd recommend sticking with stocks. On that front, let's look at three artificial intelligence (AI) stocks to bet on right now.

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Nvidia

If you want to invest in AI, you don't need to be cute and find some under-the-radar name no one has ever heard of before. In fact, buying the largest company in the world will suffice. That, of course, would be Nvidia (NASDAQ: NVDA), whose graphics processing units (GPUs) are the primary chips used to power AI workloads.

Meanwhile, the company has grown to become the largest company in the world by having a wide moat that stems from its CUDA software platform. With AI infrastructure spending set to continue climbing higher, Nvidia is a great stock to continue to bet on.

Advanced Micro Devices

While a distant No. 2 to Nvidia in the GPU market, Advanced Micro Devices (NASDAQ: AMD) looks poised to take some share following large deals with OpenAI and Meta Platforms, where the two companies will also take stakes in the chipmaker. Given its much smaller revenue base compared to Nvidia, these commitments should be a huge growth driver for the company, while it looks to continue to carve a niche in the fast-growing inference market.

Not to be overlooked is the company's position in the central processing unit (CPU) data center space, where it is the current market leader. With the proliferation of AI agents, there will need to be a lot more CPUs, representing a huge growth opportunity for AMD.

Micron Technology

A bet on Micron Technology (NASDAQ: MU) is a bet that the cyclical nature of its business is going to turn into a secular trend powered by the AI data center boom. The company is one of the big three among makers of dynamic random-access memory (DRAM), and GPUs and other AI chips need to be packaged with a specialized form of DRAM called high bandwidth memory (HBM) to perform at their best.

HBM is in short supply while demand is through the roof, and that is only being exacerbated by the fact that HBM requires upward of three times the wafer capacity of regular DRAM. Given this dynamic, Micron is seeing both its revenue surge and its gross margins balloon. It's also starting to get longer-term commitments for HBM. Given these dynamics, the stock still has plenty of room to run.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.