2 Best AI Stocks to Buy This Month

The artificial intelligence (AI) industry is expanding rapidly. With that growth, there are tremendous opportunities for investors to capitalize on the rising demand for AI-driven technologies. At the same time, AI stocks can be highly volatile, and so far, the AI boom has benefited a relatively small number of tech giants and other ancillary players.

That dynamic will likely change in the years to come as the market expands and becomes more fragmented. If you have a long-term, buy-and-hold investment strategy, you can align your mindset to navigate short-term market fluctuations and benefit from the durable growth of the AI industry by putting cash to work in quality businesses in this space.

On that note, here are two top AI stocks to consider putting some investment capital into right now.

Image source: Getty Images.

1. Alphabet

Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) vertically integrated AI infrastructure, expansive user base, and diversified revenue streams continue to power this massive business and fuel the next iteration of its powerful growth story. Alphabet's platforms have over 2 billion daily users, and that provides a huge distribution advantage along with an unparalleled dataset to train and improve its AI models.

Alphabet still makes most of its money from advertising through its Search platform. AI tools like Gemini are helping to optimize ad performance, automate tools for advertisers, and even expand the total volume of queries in Google Search, which creates new opportunities for advertisers and enhanced revenue streams for Alphabet.

Alphabet's AI initiatives are central to the growth of Google Cloud, as the AI projects continue to attract diverse clients due to the performance and cost benefits of its custom AI chips, which utilize custom silicon designs for data centers. These specialized chips, along with offerings like the Gemini models, are driving strong demand for AI infrastructure and services and positioning Google Cloud as a key growth driver for the company.

Alphabet is applying its AI technology in a wide array of fields outside of the more obvious use cases like search and cloud computing. For example, Google subsidiary Waymo uses AI and machine learning in its autonomous vehicles, which have already completed many fully autonomous paid trips. There are other more nascent businesses leveraging the power of AI too, like Alphabet's Isomorphic Laboratories and Verily that use AI for drug discovery and disease research. The robotaxi and healthcare businesses are part of Alphabet's Other Bets portfolio.

Gemini 3 is Alphabet's newest AI model family. It represents a significant leap in Google's AI capabilities and appears to have major improvements in reasoning, multimodal understanding, and agentic tasks. Gemini 3 can process and generate more complex content, such as creating interactive simulations, writing and debugging code, and understanding and acting on multistep requests in a way that was previously difficult for AI to do.

Alphabet generates tens of billions of dollars in profits and revenue annually, which it is using to fund its increasing capital expenditures in AI infrastructure. Despite its strong stock performance in 2025 (shares are up nearly 60% from the beginning of the year), the stock trades at a reasonable forward price-to-earnings (P/E) ratio compared to many of its megacap tech peers (with a P/E of around 30). For long-term investors, Alphabet still looks like an undervalued tech stock with massive growth potential.

2. Gitlab

Gitlab (NASDAQ: GTLB) is down about 40% from the start of the year, and that's due to a combination of factors. For one, the company's CFO left earlier this year to take the same position at Snowflake, which caused a negative reaction despite some solid financial results. Gitlab's revenue guidance has been more conservative lately, and increasing competitive pressure from companies like Microsoft and AI-native start-ups may have some investors concerned.

If you're not familiar with this business, Gitlab is a web-based platform for software development. It's available as a public software-as-a-service (SaaS) solution and a self-managed, on-premises solution, and is used by individuals, small teams, and large enterprises to build, test, and deploy software more efficiently.

GitLab generates most of its revenue from subscriptions. GitLab is integrating AI across the entire software development lifecycle through its suite of AI-powered features called GitLab Duo to boost developer productivity and efficiency. GitLab's open architecture works across major cloud providers from Amazon's AWS (Amazon Web Services) to Microsoft's Azure to Google Cloud, and integrates with various AI models. The company's AI-native platform and cloud-agnostic strategy help enterprises avoid vendor lock-in and addresses a growing market need for integrated and flexible software development solutions.

GitLab has shown consistent revenue growth, and its shift toward higher-tier subscriptions is bolstering its annual recurring revenue (ARR) and customer retention rates. Case in point: The company's total revenue in the most recent quarter came to $236 million, a 29% increase year-over-year. The company reported non-GAAP (generally accepted accounting principles) operating income of $39.6 million, up 21% year-over-year. GAAP net cash provided by operating activities totaled $49.4 million.

In the quarter, Gitlab's customers that deliver over $100,000 in ARR increased by 25% year-over-year. The dollar-based net retention rate was 121%, which indicates that existing customers are expanding their spending on the platform. The company is transitioning to a hybrid seat and usage-based pricing model tied to its new AI-powered Duo Agent platform, which management views as a key future growth driver.

All that being said, there are still plenty of reasons to like Gitlab and where it's going. Now could be a good time to buy some shares on the dip if you're an AI-focused, long-term investor.

Rachel Warren has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, GitLab, Microsoft, and Snowflake. The Motley Fool 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.