3 of the Best AI Stocks to Buy in October

Key Points

• Enterprise AI spending is projected to reach $1.5 trillion globally in 2025, yet only 24% of companies expect to meet their deployment targets, creating massive opportunities for execution-focused providers.

• The U.S. government's 2026 fiscal year begins today, and with it the potential for more contract awards for defense and intelligence platforms.

• Security spending for AI deployments could double to $212 billion by 2026, while government AI contracts surge, benefiting established vendors.

• 10 stocks we like better than Palantir Technologies ›

Artificial intelligence (AI) has attracted hundreds of billions of dollars in investment this year, and companies are shifting from experiments to deployment, and demanding measurable results. Security costs are set to double, government contracts are accelerating, and businesses are moving past the hype to focus on real applications.

That all helps make October a pivotal month, as Q3 earnings season begins, the government's new fiscal year triggers contract awards, and several key AI platforms launch initiatives. Here are three AI stocks among the best buys right now.

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Image source: Getty Images.

Government contracts as the base

Palantir Technologies (NASDAQ: PLTR) builds AI-powered data analytics platforms that help organizations make sense of massive, complex datasets -- from battlefield logistics for the Pentagon to supply chain optimization for corporations. The company this year landed a landmark enterprise agreement with the U.S. Army that carries a ceiling value of up to $10 billion over 10 years, consolidating dozens of existing contracts into a unified framework. On the commercial side, Palantir posted Q2 2025 revenue of $1 billion -- up 48% year over year -- with U.S. commercial sales surging 93% to $306 million.

Palantir's relationship with the government helps keep competitors at bay. The company recently obtained Cybersecurity Maturity Model Certification Level 2, a key credential for federal contracts, further reinforcing its competitive moat. The stock trades at more than 100 times sales, among the highest valuations in the market, but management guided for roughly 36% revenue growth in 2025, and I think it's worth the price. The new U.S. government fiscal year begins Oct. 1, and Palantir is well positioned to capture the wave of contract awards that typically come with each new fiscal year.

The AI security tax

CrowdStrike (NASDAQ: CRWD) provides cloud-based cybersecurity software that protects endpoints -- laptops, servers, and cloud workloads -- from cyberattacks using AI-powered threat detection. The company posted record Q2 fiscal 2026 net new annual recurring revenue (ARR) of $221 million, lifting total ARR to $4.66 billion, up 20% year-over-year.

Revenue reached $1.17 billion in the quarter, up 21%, showing resilience more than a year after the July 2024 incident when a faulty update temporarily disrupted millions of Windows devices worldwide. The reason customers stay is simple: AI adoption is multiplying cyberattack points, and companies don't want to risk switching providers.

CrowdStrike's Falcon platform protects against AI-specific threats like prompt injection, model poisoning, and chatbot data leaks, that older tools miss. The stock trades at 27 times trailing sales, richer than peers like Palo Alto Networks. But CrowdStrike maintains a gross retention rate of about 97%, and its Flex licensing program now averages more than $1 million in ARR per customer.

With management guiding for fiscal 2026 revenue between $4.75 billion and $4.80 billion, CrowdStrike is positioning itself as the indispensable "security tax" that businesses pay as they expand AI usage. It's worth buying.

The hidden AI advertising giant

AppLovin (NASDAQ: APP) runs one of the most powerful mobile advertising engines in the world. Its AI software determines which ads appear inside mobile apps, when they appear, and how much advertisers pay. In Q2 2025, the company reported $1.26 billion in revenue, up 77% year over year, along with $1.02 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and $768 million in free cash flow. These results highlight the scale and profitability of AppLovin's AI-driven ad network.

To sharpen its focus, AppLovin sold its gaming studios to Tripledot Studios this year for $400 million plus equity, exiting content creation to double down on its advertising platform. Management guided for Q3 2025 revenue of $1.32 billion to $1.34 billion, maintaining an approximately 81% adjusted EBITDA margin. With mobile advertising already a multihundred-billion-dollar industry and Oct. 1 marking the launch of its self-service platform, AppLovin is positioning itself as an indispensable AI infrastructure provider for app developers and marketers alike.

October's AI reality check

While hyperscalers build infrastructure and start-ups pitch dreams, Palantir, CrowdStrike, and AppLovin deliver measurable results today. Each dominates a critical AI bottleneck -- decision-making, security, and monetization and they are among the best AI stocks to buy right now.

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George Budwell has positions in Palantir Technologies. The Motley Fool has positions in and recommends CrowdStrike and Palantir Technologies. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.