AI and Investing 2025: Emerging Opportunities in a Transformative Sector

Last Updated on 13/02/2025 by Carl-Peter Lehmann

What is the outlook for AI and Investing in 2025? Artificial intelligence (AI) has continued its meteoric rise, shaping industries and investment portfolios alike. This piece is intended as a fun and conversational exploration of how AI might ultimately shape our lives. Like the early days of the internet revolution, it’s still too early to determine who the ultimate winners and losers of the AI transformation will be, but imagining the possibilities is part of the excitement.

As we step into 2025, the emergence of AI agents is set to revolutionize how we interact with technology. These advanced systems can autonomously perform tasks, enhancing efficiency across various sectors. For instance, OpenAI’s newly launched “Operator” can handle web-based tasks like purchasing groceries and managing expense reports, marking a significant leap in task automation.

In tandem with these advancements, there’s a substantial investment in AI infrastructure. Microsoft has announced plans to invest approximately $80 billion in fiscal year 2025 to build AI-enabled data centers, underscoring the company’s commitment to advancing artificial intelligence technology. Additionally, the Stargate Project, unveiled at the White House, aims to invest up to $500 billion over the next four years in AI infrastructure, with key figures like SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman leading the initiative. However, details about the project’s financing remain unclear, leading to some skepticism about its feasibility.

In this dynamic landscape, we’ll explore new AI investment opportunities for 2025, considering both the technological innovations and the substantial financial commitments shaping the future of artificial intelligence.

New AI and Investing Ideas for 2025

Why Invest in AI

AI is no longer confined to niche applications; it’s a driving force across industries. From revolutionizing healthcare and automating supply chains to enabling smart cities and personalized entertainment, the global AI market is expected to grow from about $250 billion in 2025 to around $1 trillion by 2030. With such growth, investing in AI offers exposure to some of the most innovative companies shaping the future.

China’s latest AI development, the open-source DeepSeek AI model, has sent shockwaves through the industry, particularly due to its surprisingly low cost and the immense compute power required to train advanced AI models. This has raised fresh questions about AI scalability, resource allocation, and the ongoing arms race in artificial intelligence. The semiconductor sector – especially NVIDIA, the dominant AI chip supplier -has taken a significant hit, as investors speculate on how reduced training costs might impact future hardware demand. However, we don’t believe this changes the long-term trajectory of AI infrastructure. If anything, it is likely to accelerate the global race toward Artificial General Intelligence (AGI), as major players – including the hyperscalers and semiconductor giants—double down on innovation to maintain their competitive edge. In the broader AI ecosystem, dominant infrastructure players will continue to lead, as the world’s most advanced AI labs and companies remain dependent on cutting-edge compute power to push the boundaries of what AI can achieve.

The Foundations of AI Investing: Still Relevant in 2025

Much of what we highlighted in 2024 remains critically relevant in 2025 and remain core to our AI investment thesis. The three foundational layers of AI – hyperscalers, semiconductors, and software – continue to dominate the landscape as key areas for investment.

Hyperscalers: Companies like Amazon (AWS), Alphabet (Google Cloud), and Microsoft (Azure) are leading the charge in upgrading their data centers to handle increasingly complex AI workloads. These giants are investing billions in infrastructure to maintain their dominance.

Semiconductors: The semiconductor industry is essential to AI’s growth, with Taiwan Semiconductor Manufacturing Company (TSMC) and NVIDIA as the main players. Other players like AMD, Broadcom, Marvell, and ASML are also instrumental in advancing the technology that powers AI.

Software: The software sector, particularly in enterprise solutions, is where most investors are now looking for tangible returns. Early leaders like Palantir, Salesforce, and CrowdStrike are demonstrating how AI can deliver real-world applications that drive business value. While consumer-facing AI, such as OpenAI’s ChatGPT, remains in its infancy from a profitability standpoint, investors are eager to see material improvements and ROI from AI innovations.

Must Read: For more details on these foundational layers, revisit our 2024 article, which offers deeper insights into these pivotal areas.

Key Trends to Watch in AI for 2025

1. Generative AI Dominance: Tools like ChatGPT and MidJourney have gained traction, with companies leveraging generative AI for personalized content, virtual customer support, and creative applications.

  • Example: Adobe (ADBE) integrates generative AI into its creative cloud tools, enabling users to generate content more efficiently.

2. AI in Healthcare: Innovations in predictive diagnostics, robotic surgery, and drug development have made healthcare a significant frontier for AI investment.

  • Example: Intuitive Surgical (ISRG) uses AI to enhance precision in robotic surgery, reducing recovery times and improving patient outcomes.

3. Edge AI and IoT: The rise of edge computing has enhanced AI’s role in Internet of Things (IoT) devices, allowing for faster and more secure data processing.

  • Example: Qualcomm (QCOM) integrates AI into its IoT chipsets, powering smart home devices and industrial IoT applications.

4. Ethical AI and Regulation: Companies prioritizing responsible AI development are gaining investor trust, particularly as governments push for stricter AI regulations.

  • Example: IBM (IBM) leads in promoting ethical AI practices with its transparent AI frameworks and compliance tools.

5. AI Agents: Intelligent AI agents are revolutionizing workflows, automating complex tasks, and enabling personal and business productivity.

  • Example: UiPath (PATH) develops AI-powered robotic process automation (RPA) solutions, streamlining operations in diverse industries.

6. Energy Demands for AI: The exponential growth of AI requires massive energy resources, spurring interest in sustainable energy solutions like nuclear and renewables. Tech companies are actively investing in energy-efficient data centers and innovative power sources.

  • Example: NuScale Power (SMR) focuses on modular nuclear reactors, which offer a sustainable solution for powering AI data centers efficiently.

Large language models (LLMs) are increasingly heading toward commoditization, with multiple players—both big tech and open-source initiatives—offering models with similar capabilities. As the underlying AI models become more accessible, the most exciting innovations will likely emerge from the applications built on top of them, delivering real-world value across industries. Whether in workforce automation, personal productivity, healthcare, or creative industries, the real breakthroughs will come from companies that can seamlessly integrate AI into our daily lives. Many of these opportunities are still in the venture phase, but as AI-driven startups scale and refine their business models, we anticipate a wave of IPOs in the coming years. The real investment potential lies in identifying which companies can truly transform the way we work, live, and interact with AI, rather than just those that build the foundational models.

Do Read: How to Build Your Own Successful DIY Share Portfolio for Long-Term Success

Top AI Stocks and Investments for 2025: Looking Beyond the Major Players

The names we’ve already covered remain the foundation around which to build a solid AI portfolio. Companies like NVIDIA, Taiwan Semi, Microsoft, Alphabet, and Palantir represent essential investments in AI infrastructure, semiconductors, and software solutions. However, as we wait to see how some of the real-world applications of AI develop and mature, there are also speculative opportunities offering interesting potential to benefit from AI’s growth. So while we wait to see how these real-world use cases play out, this year we’re focusing on a few under the radar, more speculative names:

1. Schrödinger (SDGR)
Leveraging AI in drug discovery, Schrödinger is pioneering new ways to identify and optimize molecules, dramatically reducing the time and cost of pharmaceutical development.
*1-Year Return: -15%*

2. Evolv Technology (EVLV)
A leader in AI-powered security screening, Evolv uses advanced imaging and machine learning to enhance safety in public spaces.
*1-Year Return: -16%*

3. Upstart Holdings (UPST)
Focused on AI-driven lending, Upstart uses machine learning to improve credit underwriting, expanding access to affordable loans.
*1-Year Return:: +82%*

4. SoundHound AI (SOUN)
Specializing in conversational AI, SoundHound offers voice AI solutions for various industries, including automotive and consumer products.
*1-Year Return:: +648%*

5. UiPath (PATH)
Although already mentioned in the context of AI agents, UiPath’s RPA tools continue to show strong potential in streamlining enterprise workflows.
*1-Year Return: -43%*

6. Vertiv Holdings (VRT)
Vertiv specializes in critical infrastructure for data centers, an area seeing explosive growth due to AI workloads. The company provides cooling, power management, and networking solutions vital for AI operations.
*1-Year Return:: +86%*

Because these names represent speculative opportunities, position sizing is crucial. Be prepared for extreme volatility and have a clear exit strategy to lock in gains or minimize losses as market conditions evolve. When investing in speculative assets, only allocate funds you can afford to lose, and ensure they make up no more than 5% of your total portfolio value.

AI and Investing 2025. Some speculative and more under the radar ideas
While we wait to see how real-world AI use cases develop, these are some speculative and lesser known names that are worth watching

Balancing AI Investments in Your Portfolio: Remain Vigilant About the Risks

While the potential for growth is immense, AI investments come with risks, including valuation concerns and technological competition. A significant challenge lies in the fact that much of the current spending in the AI space is not yet being matched by revenue and ROI. If the market does not begin to see tangible results soon, the AI bubble could burst in a substantial way. While we remain long-term believers in AI’s transformative potential, it’s important to recognize that a market reset, akin to the early days of the internet, could occur. The hope is that such a reset is still years away.

To mitigate these risks:

1. Diversify across industries leveraging AI, not just pure-play AI companies.

2. Balance high-growth AI stocks with more stable, dividend-paying and value-orientated investments.

3. Monitor geopolitical and regulatory developments, particularly in major markets like the US, EU, and China.

Now Read: Our top 10 stock ideas for 2025 where we focus on quality and turnaround plays to outperform the market.

Conclusion

As AI continues to redefine the way we live and work, its investment potential remains unparalleled. This piece has taken a conversational look at the opportunities and challenges of AI, recognizing that we are still in the early days of this transformative journey. Like the dawn of the internet age, it may take years to fully understand the implications and identify the enduring winners in this space.

A friendly reminder: The content here is for informational purposes only and should not be taken as financial advice. Always consult a professional before making investment decisions.

As AI continues to redefine the way we live and work, its investment potential remains massive. The key to success lies in identifying companies and sectors best positioned to capitalize on this transformative technology. By staying informed about trends and balancing risks with opportunities, you can position your portfolio to benefit from AI’s ongoing evolution. Whether you’re a seasoned investor or new to the market, 2025 is set to be another milestone year for AI and its role in shaping the future of investing.

Picture of Carl-Peter Lehmann

Carl-Peter Lehmann

Carl-Peter is a financial planner, trail runner, and passionate advocate for technological innovation. With a keen interest in AI and investing since 2017, he combines professional expertise with a forward-looking perspective on how transformative technologies shape markets and lives. As a Director at Henceforward, Carl-Peter enjoys creating educational and engaging content for investors.

Share via your favourite social media platform

Facebook
Twitter
LinkedIn
WhatsApp

Achieving financial success is not just about earning more or investing wisely - it’s also about understanding and managing the psychological biases that shape our financial decisions

DIY investing can be exciting, rewarding, and downright humbling. With access to more information and tools than ever, investors can take control of their portfolios - but success requires strategy, discipline, and a long-term mindset. Here’s what it really takes to be a successful DIY investor

When it comes to building long-term wealth, investing in the world’s most dynamic and innovative companies is one of the most effective strategies. Take a look at our fun piece intended to stimulate debate and conversation.

Sign up to our newsletter to stay informed on our latest news, views and insights on financial planning and investing

* indicates required

Download Your Free Copy of the 8 Deadly Investment Sins and Transform Your Investment Results!