2 artificial intelligence (ai) stocks that could soar in the second half of 2025

Why These 2 Artificial Intelligence (AI) Stocks Could Be Ready to Soar

The first half of 2025 presented challenges for many artificial intelligence (AI) stocks. Investor sentiment was cautious, partly due to concerns over potential import tariffs and their impact on consumer spending and corporate costs. This uncertainty led to declines across major indexes, including the Nasdaq Composite, which houses many growth-oriented technology companies. However, recent weeks have seen a notable improvement in market mood. Initial positive trade developments and reassuring commentary from tech giants about continued capital spending have helped alleviate some fears, suggesting that the long-term growth trajectories of leading companies remain intact despite macroeconomic fluctuations.

This shift in sentiment, coupled with the inherent strength and promising outlooks of certain businesses, creates a compelling opportunity to consider investments in the AI space. Two particular companies, leaders in their respective industries, appear especially well-positioned to potentially see their stocks 'soar' during the second half of the year.

Amazon: Resilience and Cloud Dominance

Amazon's stock experienced a relatively flat performance in the first half of the year. Investors harbored concerns that potential tariffs could negatively impact its vast e-commerce business by increasing prices and dampening demand, and also potentially prompt Amazon Web Services (AWS) customers to curb their cloud spending. Yet, there are strong arguments suggesting these challenges may not significantly hinder the tech giant.

Amazon's diverse global sourcing and extensive product catalog provide flexibility, allowing the company to adapt more readily to a shifting tariff environment. Furthermore, the consistent messaging from many major corporations indicates that investment in AI strategies remains a priority, suggesting robust demand for cloud infrastructure and services provided by AWS will likely continue.

A key takeaway from Amazon's recent history is its proven ability to navigate difficult economic climates. Just a few years ago, the company strategically revamped its cost structure in response to inflationary pressures. This initiative delivered tangible results, helping Amazon rebound from a period of rare annual losses. This optimized operational efficiency provides a strong foundation to absorb and mitigate potential future cost increases, such as those from tariffs, making the business more resilient.

Crucially, the ongoing global buildout of AI infrastructure heavily relies on powerful cloud computing services. As the world's largest cloud provider, AWS is a direct beneficiary of this trend. Customers require immense compute power, storage, and specialized AI tools, all of which AWS provides. This demand is expected to fuel continued growth in Amazon's high-margin cloud segment, driving overall profitability.

Add to this an increasingly attractive valuation, with Amazon trading around 35 times forward earnings estimates, down from over 40 times previously, and the potential for renewed investor interest in the stock during the second half of 2025 becomes clear.

Alphabet: AI at the Core of a Digital Empire

Alphabet, the parent company of Google, also saw its stock dip in the first half of 2025 before embarking on a significant recovery since April. The initial decline mirrored the broader market's uncertainty regarding growth stocks.

Alphabet stands as a market leader with a long history of generating substantial growth and profitability, primarily driven by its dominant Google search platform and its rapidly expanding Google Cloud business. Google's advertising revenue remains incredibly strong, benefiting from advertisers' need to reach users on the world's most popular search engine. Google Cloud has become a multi-billion dollar revenue stream, offering a wide array of services to enterprises worldwide.

AI is not merely an add-on for Alphabet; it's fundamentally integrated into its core operations and growth strategy. The company has invested heavily in developing its own advanced large language models (LLMs) and AI capabilities. These innovations directly enhance the user experience in Google Search, making results more relevant and engaging. For advertisers, this translates into more targeted and effective ad campaigns, reinforcing their spending on the platform.

The Google Cloud unit is experiencing significant momentum, with AI products and services acting as a powerful growth engine. In the latest reported quarter, Google Cloud revenue surged by 28% to over $12 billion. This strong growth trajectory is expected to continue as companies across industries continue to adopt and scale their AI initiatives, leveraging Google Cloud's infrastructure and tools. We are still in the relatively early stages of widespread AI adoption, suggesting a long runway for cloud-driven growth.

Perhaps most compelling for investors right now is Alphabet's valuation. Trading at a relatively modest 18 times forward earnings estimates, the stock appears notably undervalued compared to its growth prospects and market position. This 'dirt-cheap' valuation could serve as a significant catalyst, attracting investors and potentially propelling this AI leader's stock considerably higher in the coming months.

Positioned for the Future

Both Amazon and Alphabet represent established powerhouses that are not only riding the AI wave but are also fundamentally contributing to its acceleration. Their leadership positions, proven resilience, and strategic integration of AI into their core businesses make them compelling candidates for investors looking to capitalize on the potential market recovery and the continued expansion of the AI revolution in the second half of 2025.