The rapid growth of artificial intelligence (AI) continues to reshape industries around the world, and experts are closely monitoring its trajectory. In December 2024, Roosevelt Bowman, Senior Investment Strategist at Bernstein Private Wealth Management joined ‘Wealth’ hosted by Yahoo Finance to share his insights on the AI landscape heading into 2025. Bowman predicts that AI will move beyond its current focus on semiconductors and cloud computing. He expects that it will expand into power infrastructure and cooling technologies, which play a crucial role in running large-scale AI models effectively.
Bowman also highlighted that AI models have tremendous power requirements of AI data centers. He emphasized the need for reliable energy sources to meet these demands and noted that this could lead to new market opportunities in sectors that support AI’s operational needs.
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On February 28, 2025, Alex Zukin, managing director and head of software research at Wolfe Research joined Market Domination Overtime on Yahoo Finance to discuss the evolving role of AI in the software industry. Zukin noted that 2025 could be a pivotal year for software companies to unlock the real value of AI.
He pointed out that AI technology is moving extraordinarily quickly. Zukin expects this year to mark a turning point as companies start to implement AI solutions into production and unlock benefits. However, he cautioned the companies not to overpromise on artificial intelligence.
Zukin also told Yahoo Finance about the seasonality of the enterprise software market. The first quarter is typically difficult, but he expects growth to accelerate in the second half of 2025.
Beyond software, there is significant potential for AI to drive innovation across various industries.
With this background in mind, let’s take a look at the 8 fastest-growing AI stocks to buy now.
A computer screen showcasing Artificial Intelligence and Machine Learning algorithms at work.
Methodology
To compile our list of the 8 fastest-growing AI stocks to buy right now, we looked for the largest and most popular AI companies. We reviewed Insider Monkey’s database of prominent AI stocks, financial media reports, ETFs, and various online resources to compile a list of more than 30 AI stocks. To look for the fastest-growing AI stocks, we narrowed down our list to companies with a compound annual growth rate (CAGR) in revenue exceeding 10% over the past 3 years and a year-over-year revenue growth rate of more than 25%. Next, we focused on the top 8 fastest-growing AI stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. Finally, the 8 fastest-growing AI stocks to buy right now were ranked in ascending order based on the number of hedge funds holding stakes in them, as of Q4 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
8 Fastest Growing AI Stocks To Buy Right Now
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Year-Over-Year Revenue Growth Rate: 28.79%
3-Year Revenue CAGR: 22.95%
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) is an American software company that specializes in software platforms for big data analytics. The company builds and deploys software platforms that serve as the central operating systems for its customers. Through its AI-powered platforms, Palantir Technologies Inc. (NASDAQ:PLTR) serves government and defense customers as well as commercial clients across manufacturing, healthcare, and financial services. PLTR ranks among the best high-growth stocks to invest in.
The company is focused on embedding scalable AI solutions to drive innovation across industries. On March 5, Palantir Technologies Inc. (NASDAQ:PLTR) announced a joint venture with TWG Global with an aim to transform the use of AI in financial services such as banking, investment management, and insurance. This collaboration will see Palantir Technologies Inc.’s (NASDAQ:PLTR) advanced AI infrastructure combine with TWG’s expertise in financial operations to create a unified, fully embedded, enterprise-wide AI strategy that will replace fragmented solutions. The full-scale AI solution will embed intelligence across every core function of financial institutions and insurance companies including compliance, fraud detection, risk monitoring, credit and lending, and operational efficiency.
7. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Year-Over-Year Revenue Growth Rate: 29.39%
3-Year Revenue CAGR: 39.65%
Number of Hedge Fund Holders: 77
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is an American cybersecurity technology company that ranks among the best high-growth stocks to invest in. The company’s cloud-native Falcon platform, which is powered by AI, protects critical areas of enterprise risk and provides endpoint security, threat intelligence, and response services.
Aristotle Atlantic Partners, LLC, an investment advisor, has a positive outlook on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and stated in its “Core Equity Strategy” Q4 2024 investor letter that the cloud cybersecurity market is expected to experience strong growth over the next few years. This growth will be driven by continued migration from on-premises to cloud-based architecture. Aristotle Atlantic Partners, LLC expects CrowdStrike Holdings, Inc. (NASDAQ:CRWD) to capitalize on this trend due to its early-mover advantage, multiple product offerings, and native integrations with leading cloud platforms. The increase in sophisticated threats from state-backed cyber criminals leveraging high-performance computing and AI demands higher spending on advanced cybersecurity products. The investment advisory firm believes that the total addressable market will experience significant growth over the next 4 calendar years. The investor letter also noted that CrowdStrike Holdings, Inc.’s (NASDAQ:CRWD) cloud-native architecture and unified platform approach provide competitive advantages that lead to high customer retention.
6. Datadog, Inc. (NASDAQ:DDOG)
Year-Over-Year Revenue Growth Rate: 26.12%
3-Year Revenue CAGR: 37.67%
Number of Hedge Fund Holders: 83
Datadog, Inc. (NASDAQ:DDOG) is an American software company that provides a monitoring and security platform for cloud applications. The company’s SaaS platform helps organizations of various sizes to integrate and automate infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security, and many other capabilities to provide unified, real-time observability and security. Datadog, Inc. (NASDAQ:DDOG) is one of the best high-growth stocks to buy.
On February 10, DA Davidson analysts updated the firm’s price target on Datadog, Inc. (NASDAQ:DDOG) from $150 to $165 and maintained a “Buy” rating. This decision follows an analysis of proprietary developer datasets showing healthy usage and stable demand for the company’s services. The analysts are confident that Datadog, Inc. (NASDAQ:DDOG) can capitalize on current market opportunities, especially in helping customers observe large language models (LLMs). The firm’s positive outlook is also supported by the company’s recent acquisition of Quickwit. This move is expected to enhance Datadog, Inc.’s (NASDAQ:DDOG) AI software infrastructure offerings. DA Davidson’s analysts believe that the company is positioned well to benefit from the ongoing shift from AI hardware to AI software infrastructure. Insights from the Developer Ecosystem Network and field checks show that Datadog, Inc. (NASDAQ:DDOG) is well-equipped to help customers manage AI-related workloads.
5. Snowflake Inc. (NYSE:SNOW)
Year-Over-Year Revenue Growth Rate: 29.21%
3-Year Revenue CAGR: 43.81%
Number of Hedge Fund Holders: 85
Snowflake Inc. (NYSE:SNOW) is an American cloud-based data storage company that ranks among the best high-growth stocks to invest in. The company operates a secure and scalable AI Data Cloud platform that allows organizations to collaborate, build AI-powered data apps, unlock data insights, and power their business with AI.
The company is strategically focused on AI advancements through collaborating, offering technical support, and funding innovation within the AI ecosystem. On February 27, Snowflake Inc. (NYSE:SNOW) announced that it will be deepening its investments in AI innovation by launching its Silicon Valley AI Hub at its Menlo Park campus. This 30,000-square-foot space, set to open in Summer 2025, will serve as a hub for developers, startups, and business leaders to learn and advance innovation in AI. The Silicon Valley AI Hub will feature facilities such as flex desks for startups, event spaces, training rooms, and a Customer Experience Center for executive meetings. Snowflake Inc. (NYSE:SNOW) also aims to invest up to $200 million in next-generation startups innovating on its AI Data Cloud through its Startup Accelerator Program. Additionally, the company is committing $20 million to AI upskilling initiatives and supporting over 4,000 customers with AI and machine learning capabilities.
4. AppLovin Corporation (NASDAQ:APP)
Year-Over-Year Revenue Growth Rate: 43.44%
3-Year Revenue CAGR: 19.02%
Number of Hedge Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) is an American mobile technology company that provides end-to-end software and AI solutions for businesses to reach, monetize, and grow their global audiences. AppLovin Corporation (NASDAQ:APP) is one of the best high-growth stocks to invest in. The company is working to improve its advertising AI models, which are still in the early stages. AppLovin Corporation (NASDAQ:APP) has a promising roadmap ahead filled with opportunities to refine its models. In 2025, the company plans to launch a self-service dashboard powered by AI agents to help its customers manage their campaigns more effectively.
ClearBridge Investments, an investment management company, has a positive outlook on AppLovin Corporation (NASDAQ:APP) and pointed out in its “ClearBridge Mid Cap Strategy” Q4 2024 investor letter that the company has opportunities to continue to expand and grow its share in the mobile app marketing sector as mobile gaming ad spending recovers. The investment management firm also noted that AppLovin Corporation (NASDAQ:APP) has the potential to expand in its addressable e-commerce advertising market, where initial efforts have shown promise. ClearBridge Investments believes that with strong incremental margins and management keeping expenses controlled, AppLovin Corporation (NASDAQ:APP) is positioned to generate significant growth in free cash flow as revenue continues to rise.
3. Broadcom Inc. (NASDAQ:AVGO)
Year-Over-Year Revenue Growth Rate: 43.99%
3-Year Revenue CAGR: 23.39%
Number of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is an American multinational company that designs, develops, manufactures, and supplies AI semiconductors. The company is also known for its enterprise software and security solutions. Broadcom Inc. (NASDAQ:AVGO) serves the data center, cloud, networking, broadband, wireless, storage, industrial, and enterprise software markets. AVGO ranks among the high-growth stocks in the AI sector.
On March 7, 2025, Piper Sandler reiterated its “Overweight” rating for Broadcom Inc. (NASDAQ:AVGO) and set a price target of $250. This decision was based on the company’s strong performance driven by its AI growth. Broadcom Inc. (NASDAQ:AVGO) reported strong earnings to exceed estimates for the January quarter and gave better-than-expected projections for the April quarter. A significant part of the company’s revenue came from its XPU and AI-related networking, which brought in $4.1 billion in the January quarter and is expected to rise to $4.4 billion in the April quarter to mark a 44% increase year-over-year. Broadcom Inc.’s (NASDAQ:AVGO) management noted that 70% of its largest software clients are now using VMware’s VCF. This highlights the company’s successful execution and innovation in the enterprise software space. Piper Sandler’s analyst expressed confidence in the company’s future growth in the AI and networking sectors.
2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Year-Over-Year Revenue Growth Rate: 33.89%
3-Year Revenue CAGR: 22.17%
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese multinational semiconductor company that ranks among the fastest-growing AI stocks to buy now. The company specializes in manufacturing, packaging, and testing integrated circuits for various industries. With global operations spanning Asia, Europe, and North America, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is well-positioned to supply AI hardware to its customers around the world.
The company is focused on supporting America’s leading AI and technology companies by producing advanced semiconductors. On March 4, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced its plan to invest an additional $100 billion in advanced semiconductor manufacturing in the US. This adds to Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) ongoing $65 billion investment in Phoenix, Arizona. The company is expected to invest a total of $165 billion in the US. The expansion includes 3 new fabrication plants, 2 advanced packaging facilities, and a major research and development team center. This project will be the largest single foreign investment in US history.
1. NVIDIA Corporation (NASDAQ:NVDA)
Year-Over-Year Revenue Growth Rate: 114.20%
3-Year Revenue CAGR: 69.25%
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is an American multinational corporation and technology company that designs and manufactures AI-driven solutions, advanced chips, systems, and software. The company’s graphics processing units (GPUs) are used in AI solutions and are considered the backbone of AI infrastructure. NVIDIA Corporation (NASDAQ:NVDA) is one of the fastest-growing AI stocks to invest in.
On February 27, 2025, Bernstein analyst Tom O’Malley increased the firm’s price target for NVIDIA Corporation (NASDAQ:NVDA) from $175 to $185 and maintained an “Outperform” rating. The analyst noted that the company’s Q4 results were “very solid,” highlighting record data center revenues of $35.6 billion. This performance was driven by a rapidly accelerating Blackwell ramp-up. O’Malley viewed NVIDIA Corporation’s (NASDAQ:NVDA) Q1 guidance as “fine,” noting it exceeded revenue expectations and was roughly in line with earnings forecasts. The earnings call was described as “relatively quiet,” suggesting NVIDIA Corporation (NASDAQ:NVDA) has overcome its main production challenges with all Blackwell configurations now in full production.
Overall, NVDA ranks first among the 8 fastest-growing AI stocks to buy right now. While we acknowledge the potential of these high-growth stocks, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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