3 best artificial intelligence stocks to buy in june

Artificial intelligence (AI) stocks have been the must-own investments over the past few years, and the exciting news for investors is that we are still relatively early in the widespread deployment of AI. This means many promising AI stocks remain attractive buys, even at their current levels.

For investors looking to capitalize on the AI revolution, three stocks stand out as top considerations for June: Nvidia, Taiwan Semiconductor Manufacturing (TSM), and Meta Platforms (META). Each of these companies approaches the AI market from a distinct angle, offering unique long-term investment potential.

Understanding the Opportunity: Why These Stocks?

• Nvidia is a dominant supplier providing the essential infrastructure for the global AI arms race.
• Taiwan Semiconductor Manufacturing is the critical foundry, producing high-tech chips for virtually all major hardware companies, effectively powering the AI spending surge from a neutral position.
• Meta Platforms, often recognized for its vast social media empire, holds significant potential as its stock valuation currently seems to overlook its substantial, long-term investments in cutting-edge AI applications and hardware beyond its core advertising business.

Nvidia: Fueling the AI Infrastructure Boom

Nvidia is best known for its graphics processing units (GPUs), the indispensable hardware required to train and run today's complex AI workloads. The company commands an impressive market share, estimated to be around 90% in this critical sector. Driven by unprecedented demand for AI capabilities, the GPU market has exploded, resulting in jaw-dropping growth for Nvidia.

While growth rates are naturally moderating from their peak, Nvidia's performance remains exceptional. In the first quarter, revenue grew by 69% year over year, reaching $44 billion, with projections for a robust 50% growth in the second quarter. This underscores the continued strength of demand.

As long as the massive investment and development in AI continue, Nvidia is positioned for success. Although its shares trade at approximately 33 times forward earnings, a valuation similar to other large technology companies, Nvidia's superior growth trajectory and immense future potential distinguish it. This strong combination makes Nvidia a compelling stock pick for June.

Taiwan Semiconductor Manufacturing: The Indispensable Foundry

Taiwan Semiconductor Manufacturing (TSM) is a direct beneficiary of the insatiable demand experienced by companies like Nvidia. Since Nvidia and most other major tech firms designing advanced hardware do not manufacture their own chips, they rely on foundries like TSM. TSM's factories produce the cutting-edge semiconductors that are the building blocks of the AI revolution.

Investing in TSM isn't about picking a specific winner in the AI race; it's a strategic bet on the overall, sustained increase in AI-related spending across the entire industry. This broad exposure to the fundamental hardware powering AI makes TSM a foundational component of an AI investment strategy.

Remarkably, despite being fueled by multiple significant tailwinds, TSM's stock does not trade at a premium valuation. It stands at approximately 22.9 times forward earnings, roughly equivalent to the valuation of the broader market as represented by the S&P 500. Given the substantial growth expected for TSM and its attractive starting valuation, it represents a "no-brainer" AI stock to consider adding in June.

Meta Platforms: AI Powering the Future

Meta Platforms, widely recognized by its former name, Facebook, generates the vast majority of its revenue (98%) from advertising across its suite of popular social media platforms, including Facebook, Instagram, Threads, WhatsApp, and Messenger. This core business remains a significant cash flow engine.

However, Meta is also making substantial investments in artificial intelligence, extending far beyond optimizing ad targeting. Part of this AI focus is undoubtedly aimed at improving the performance and effectiveness of its existing advertising systems, which should enhance revenue and profitability. Additionally, Meta is developing internal AI capabilities, including AI agents, to boost the productivity of its engineering teams and help manage operating expenses.

Perhaps Meta's most ambitious AI ventures lie in its long-term hardware initiatives, such as AI-powered glasses and other devices designed to integrate AI into the physical world. CEO Mark Zuckerberg has articulated a vision where AI glasses become the primary interface for deploying AI in real-world scenarios, predicting widespread adoption within the next five to ten years. While the ultimate success of these pioneering hardware bets is yet to be determined, Meta's current stock valuation appears to be based solely on its established advertising business.

Trading at around 27 times forward earnings, the market has not factored in any potential upside from Meta's innovative, ancillary AI investments. This valuation represents a fair price for the strength of Meta's core legacy business. However, should even one of its forward-looking AI hardware projects achieve significant traction, Meta's stock could experience substantial gains rapidly. Consequently, Meta stands out as one of the top AI stock picks worth considering this June.

Summary and Investment Outlook

The artificial intelligence trend is not just a fleeting phenomenon; it's a transformative technological shift creating significant investment opportunities. By focusing on companies providing foundational technology, essential infrastructure, and innovative applications, investors can gain exposure to different facets of this growth.

Nvidia offers exposure to the high-performance hardware driving AI, TSM provides the crucial manufacturing backbone for the entire industry, and Meta Platforms combines a robust core business with potentially explosive upside from next-generation AI applications and hardware. Considering the ongoing expansion of AI, these three stocks present compelling cases for potential investment in the current market environment.

As always, investing involves risk, and it's essential to conduct your own research and consider your personal financial situation before making any investment decisions.