Top AI Stocks to Add to Your Portfolio for Healthy Returns

An updated edition of the July 3, 2025, article.

Artificial Intelligence (AI) is transforming industries by powering machines to analyze data, recognize patterns and make decisions. The rapid deployment of generative AI (Gen AI), agentic AI, and multi-modal learning supported by advanced hardware like GPUs and TPUs is fueling innovation across healthcare, finance, robotics, cybersecurity and e-commerce. AI now powers chatbots, diagnostics, fraud detection and autonomous systems, boosting agility while simultaneously improving efficiency.

Microsoft MSFT backed Open AI recently introduced GPT-5, which offers multi-modal understanding across text, images, audio and more. The latest model offers stronger reasoning, emotional intelligence, persistent memory for personalized interactions and an autonomous task-performing agent. AI is evolving rapidly, with Meta Platforms’ META latest AI systems boasting self-improvement without human intervention, pushing AI toward superintelligence. Meanwhile, Baidu plans to release an advanced reasoning AI model, along with upgrades to Ernie 5.0, spicing up the AI race between the United States and China.

Per IDC, global spending on AI is expected to be $307 billion in 2025, expanding to $632 billion by 2028. Per Gartner, global Gen AI spending is expected to hit $644 billion in 2025, indicating 76.4% growth over 2024. U.S. tech giants, including Microsoft, Adobe, Alphabet and Meta Platforms, have been at the forefront of bringing remarkable advances to AI technology, well supported by powerful AI chips from NVIDIA NVDA and Broadcom AVGO.

Powerful hardware is helping complex AI applications like computer-aided design (CAD), and product lifecycle management (PLM) is driving prospects of companies like PTC PTC. Alphabet GOOGL is infusing AI into its search business in order to attract more users, while Meta Platforms’ focus on integrating AI into its platforms is driving user engagement. Both initiatives are driving ad revenue growth.

We believe that the rapid deployment of AI technology and huge spending on its development efforts offer significant growth opportunities for investors. Our Artificial Intelligence Screen is an invaluable source for identifying AI stocks with massive growth prospects.

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3 AI Stocks to Buy Right Now

PTC is benefiting from strong demand for its PLM and CAD solutions. This Zacks Rank #1 (Strong Buy) company is generating significant recurring revenues, driven by its broad product portfolio, and solid investment in cloud and SaaS offerings. You can see the complete list of today’s Zacks #1 Rank stocks here.

Solid demand for precision designing, as well as complex prototyping and digitalization, is expected to drive the demand for PTC’s 3D-CAD offerings in the automotive, aerospace, manufacturing, healthcare and defense verticals. Increasing demand for PTC’s major technology platforms, including Creo, Windchill, ThingWorx and Vuforia Studio, is expected to drive top-line growth. 

PTC has lifted the fiscal 2025 Annual Recurring Revenue guidance at constant currency from 7-9% to 8-9%. The company is emphasizing continuing momentum in go-to-market and AI product initiatives. Revenues for fiscal 2025 are projected to be $2,570-$2,630 million, indicating a year-over-year rise of 12-14%. Non-GAAP earnings are now estimated to be $6.63-$7.03, suggesting a rally of 31-38%.

Broadcom is benefiting from an expanding portfolio, a rich partner base, a solid VMware business, a strong balance sheet and an impressive free cash flow. Custom AI accelerators (XPUs), which are a type of application-specific integrated circuit (ASICs) chips, are necessary to train Gen AI models, and they require complex integration of compute, memory and I/O capabilities to achieve the necessary performance at lower power consumption and costs. Strong demand for Broadcom’s ASICs is driving top-line growth.

AVGO sees massive opportunities in the AI space as its three hyperscaler customers have started to develop their XPUs. It believes that by 2027, each of AVGO’s three hyperscalers plans to deploy 1 million XPU clusters across a single fabric.

Strong demand for AI networking revenues, which skyrocketed 170% year over year, represented 40% of AI revenues. This Zacks Rank #2 (Buy) company’s networking portfolio, which comprises Tomahawk switches, Jericho routers and NICs, is helping Broadcom gain market share among hyperscalers. Broadcom’s focus on delivering AI-powered, proactive security to stay ahead of evolving cyber threats has been noteworthy.

Microsoft is benefiting from its strategy of infusing AI into its applications. AI assistants, including Microsoft 365 Copilot for commercial customers and the consumer Copilot in Windows, reached 100 million monthly active users in fourth-quarter fiscal 2025. The integration of AI capabilities across this Zacks Rank #2 company’s product portfolio is driving revenues per user for Microsoft 365 commercial cloud products.

In terms of cloud infrastructure, Microsoft has transformed every Azure region into an AI-first environment with liquid cooling capabilities, positioning itself at the forefront of the AI infrastructure wave. Microsoft has added more than two gigawatts of datacenter capacity over the past 12 months, now operating more than 400 datacenters across 70 regions globally, above any other cloud provider.

Microsoft's early and aggressive investments in AI, particularly through its partnership with OpenAI, have positioned Azure as the preferred platform for AI workloads, attracting both startups and enterprises seeking to leverage cutting-edge AI capabilities. Microsoft’s deep partnership with OpenAI and its Azure AI Foundry platform has already attracted more than 14,000 customers building generative AI models and intelligent agents.

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This article originally published on Zacks Investment Research (zacks.com).

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