Wall Street has been captivated by artificial intelligence for more than two years. Technology companies are reporting record results, investors are racing to get ahead, and analysts can barely keep up with revising their forecasts. But not every AI stock is the same. Some companies are growing at a breathtaking pace but still are not making money. Others have solid profits, but their growth is beginning to slow. And then there are companies that can do both at the same time. Those are now the hottest commodities on the market.
What are we actually looking for when we talk about a “good" AI stock?
Analysts at Seeking Alpha, who use quantitative stock ratings, evaluate each stock according to five basic criteria: valuation, growth, profitability, momentum, and earnings estimate revisions. Companies that score well in all five areas at once are rare. Most technology stocks excel in one or two categories but lag behind elsewhere.
According to data from Morningstar and NerdWallet, the safest approach to AI stocks is not to bet on a single name, but to understand which part of the value chain a given company operates in. Some manufacture chips and hardware, others build cloud infrastructure, and some create specific software platforms for businesses. Each layer carries different risks and different potential rewards.
Nvidia: Numbers That Seem Unreal
Try putting this figure into context: Nvidia, the world’s largest company with a market capitalization of more than $5 trillion, reported revenue of $81.6 billion for the first quarter of fiscal 2027. That represents year-over-year growth of 85%. Even more strikingly, the pace of growth is accelerating. Nvidia grew by 56% in the second quarter of 2025, 62% in the third, 73% in the fourth, and has now jumped to 85%.
Data center revenue, the heart of the entire business, rose 92% to $75.2 billion. The company has newly divided this category into two parts: hyperscale customers generated $37.9 billion (an increase of 115%), while the segment covering AI cloud, industry, and enterprise added $37.4 billion (an increase of 74%).
Gross margin remains at 75% despite rising costs. For comparison, such high margins are traditionally associated with pharmaceutical or software companies, not hardware manufacturers. That alone says a great deal about the strength of Nvidia’s market position. The company controls approximately 98% of the market for data center graphics processors and currently has no comparable competitor.
Palantir: The Platform the Entire Market Has Been Waiting For
If Nvidia sells the picks and shovels for the AI gold rush, Palantir is the company that tells miners exactly where to dig.
The AIP (Artificial Intelligence Platform) connects the data, decision-making processes, and operating activities of companies and government agencies in real time. This capability translates into tangible results: last year, revenue jumped 56% to more than $4.4 billion. In the fourth quarter, growth accelerated further to 70% year over year, while revenue from U.S. commercial customers rose 137%. Palantir currently has no directly comparable competitor. Analysts estimate that revenue could approach $15 billion by 2028, more than tripling from today’s level.
The stock is expensive—no one denies that. It trades at high revenue and earnings multiples. But if the company can sustain this growth and its margins, the premium valuation may be justified. Palantir is also one of the few software companies that does not need to keep increasing research spending to survive, because its platform is deeply embedded in customers’ operations and is not something they can easily replace.
CoreWeave and Nebius: Two Newcomers We Will Be Hearing About
These are probably the two least familiar names in this article, but their figures are among the most surprising in the entire market. CoreWeave and Nebius are so-called neocloud companies. Put simply, they are cloud providers focused exclusively on AI computing, unlike traditional cloud giants such as Amazon, Microsoft, or Google, where AI is just one of many services.
CoreWeave reported revenue of $2.1 billion for the latest quarter, up 112% year over year. But the real bombshell lies elsewhere: the company has a backlog of nearly $100 billion. Roughly one-third of that is expected to be realized over the next two years.
Nebius is doing even better. It reported first-quarter revenue of $399 million, up 684% year over year. Yes, you read that correctly. Such growth rates used to be typical only of startup presentations, not publicly traded companies.
Both companies have one more thing in common: Nvidia. Nvidia itself holds stakes in both companies. When a company that is itself growing by 85% annually bets on other companies, they are worth watching.
Alphabet: The Technology Giant with the Strongest Momentum
Google, YouTube, Android, Chrome, Google Cloud. All of these belong to Alphabet, and it is precisely this diversification that makes the company interesting even at a time when investors are thinking about AI differently than they did a year ago.
Gemini, Alphabet’s own language model, now has more than 650 million monthly active users. OpenAI’s ChatGPT has an estimated 845 million. The gap is narrowing, and more importantly, Alphabet has an enormous advantage over OpenAI: billions of people who use Google every day automatically receive answers powered by Gemini without having to download a new app.
Google Cloud reported operating income of more than $6.5 billion in the first quarter, up 203% year over year. Alphabet’s total net income over the past twelve months exceeded $160 billion, an increase of 44% year over year.
IMPORTANT: The market returns and forecasts mentioned in this article are based on data published by Seeking Alpha, Yahoo Finance, Morningstar, and NerdWallet as of the publication date. This text does not constitute investment advice.
