The artificial intelligence (AI) megatrend has the potential to generate sizeable wealth for early investors. According to a Statista report, the total addressable market for AI is forecast to expand from US$136 billion in 2023 to US$827 billion in 2030, indicating an annual growth rate of almost 30%, providing sector leaders with an opportunity to grow revenue and earnings at a rapid pace.
While investing in AI stocks might seem overwhelming to new investors, here are three top tech stocks you can consider buying today to benefit from multiple secular tailwinds.
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Nvidia stock
It’s impossible to ignore Nvidia (NASDAQ:NVDA), given that the chipmaker is shovelling the AI gold rush. Valued at US$2.4 trillion by market cap, Nvidia stock is down 26% from all-time highs. Despite the recent pullback, Nvidia has returned a monstrous 22,680% to shareholders in the past decade.
While Nvidia is among the largest companies in the world, its growth story is far from over. For instance, Wall Street analysts expect Nvidia’s earnings per share to expand from US$1.3 per share in fiscal 2024 (ended in January) to US$2.72 per share in 2025 and US$3.74 per share in 2026. So, priced at 36.7. times forward earnings, Nvidia stock trades at a “reasonable” valuation given its growth forecasts.
Last week, investment firm Morgan Stanley maintained an “overweight” rating on Nvidia with a price target of US$144, indicating an upside potential of over 40%.
Meanwhile, analysts and investors will be closely watching Nvidia’s data centre performance, a business that grew its sales by 427% year over year in the fiscal first quarter (Q1) of 2025.
Microsoft stock
Valued at US$2.93 trillion by market cap, Microsoft (NASDAQ:MSFT) is the largest company globally. With roughly US$250 billion in annual sales, Microsoft enjoys an early mover advantage in the AI race due to its sizeable investment in OpenAI, the parent company of ChatGPT.
In fiscal Q4 of 2024 (ended in June), Microsoft’s Office 365 software sales rose 12% year over year, while personal 365 subscriptions increased from 80.8 million to 82.5 million in the last three months. Moreover, LinkedIn sales were up 10%, and its cloud business saw a 29% uptick in the top line.
Despite an uncertain environment, Microsoft increased sales by 15% to US$64.7 billion and earnings by 10% to US$2.95 per share in the June quarter.
Super Micro Computer stock
The final AI stock on my list is Super Micro Computer (NASDAQ:SMCI), a distributor and manufacturer of information technology solutions and other computer products. While SMCI stock is down 49% from all-time highs, it has returned over 2,000% to shareholders since August 2014. In its most recent quarter, Super Micro Computer more than tripled its sales and quadrupled earnings per share.
Super Micro manufactures high-density servers that are required to run AI applications, driving its sales growth in the last year. Analysts expect SMCI to increase sales by 109.7% to US$14.93 billion in 2024 and earnings by 102% to US$23.86 per share in 2024.
Priced at 25.5 times forward earnings, SMCI stock is quite cheap and trades at a discount of over 50% to consensus price target estimates.
