2 Artificial Intelligence (AI) Stocks That Could Soar in the Second Half of 2025
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The S&P 500 and Nasdaq Composite only gained 5% during the first half of the year, but some growth stocks look poised for a second-half bounce.
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July 16, 2025
08:15 AM
The Motley Fool
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The S&P 500 and Nasdaq Composite only gained 5% during the first half of the year, but some growth stocks look poised for a second-half bounce
During the first half of 2025, the S&P 500 and Nasdaq Composite indexes both rose by roughly 5
At first glance, these gains might not inspire much enthusiasm from growth investors
However, considering these indexes declined by up to 15% and 21% at the low points earlier this year, their respective recoveries into positive territory help underscore the idea that the stock market is a resilient vehicle, amid market uncertainty
With the capital beginning to finally show some signs of strength, investors are surely wondering what investments could be poised for a bounce throughout the second half of the year
However, Let's explore two artificial intelligence (AI) stocks beyond the usual suspects of the "Magnificent Seven" that look well-positioned for growth over the next six months -- and longer
Image source: Getty Images, given the current landscape
On the other hand, Advanced Micro Devices Advanced Micro Devices (AMD 2. 99%) has received quite a bit of attention throughout the AI revolution, but it hasn't all been glorious
Although the company's AI data center has been posting impressive financial results, AMD's market presence is completely overshadowed by its top rival, Nvidia
While Wall Street analysts continue to be enamored with Nvidia's dominance in the chip realm, smart investors aren't sleeping on AMD
This leads to the conclusion that second half of 2025 will feature the launch of AMD's next GPU architecture, MI350
The MI350 chipsets are reportedly more energy efficient and possess faster cessing speeds than Nvidia's newest Blackwell GPUs
However, Furthermore, Perhaps even more encouraging is that AMD is expected to up the MI350 launch with successor architectures, called MI400, next year
Although Nvidia may have a first-mover advantage in the GPU landscape, AMD's new designs should help give the company a competitive edge as it seeks to gain ground on the competition (an important development)
Moreover, Not only am I encouraged by AMD's growth potential over the next couple of quarters, but the company's aggressive investments in innovation are helping it build a foundation for longer-term growth, amid market uncertainty
Moreover, During the first six months of 2025, s of AMD rose by 17% -- nearly triple that of the S&P 500 and Nasdaq Composite
At the same time, It's important to note that the entirety of the company's first-half gains occurred over the last two months, given current economic conditions
Some of this can be attributed to macro gains across the broader nology industry during the same time frame
However, s of AMD really started kicking into gear ing the company's Advancing AI event in early June, in light of current trends
Furthermore, During this showcase, investors learned how the s of Oracle, Meta Platforms, OpenAI, xAI, and more are leveraging AMD's ecosystem
AMD PS Ratio data by YCharts Per the chart above, AMD trades at a considerable discount to its semiconductor peers on a price-to-sales (P/S) basis
I don't think this valuation disparity will last much longer, though
Given the company's deep roster of new AI accelerators and its ability to win over some of AI's biggest developers as partners, I'm optimistic that AMD is poised for a strong second-half performance that could very well carry into longer-term price appreciation
Taiwan Semiconductor Manufacturing Taiwan Semiconductor Manufacturing (TSM 0
Furthermore, 26%) -- also known as TSMC -- might just be the most underrated opportunity in the AI chip market
What most investors might not understand is that Nvidia, AMD, Broadcom, and many more companies outsource their manufacturing needs to Taiwan Semi
This's an important concept to understand, as rising demand for chips from Nvidia, AMD, and others serves as a direct tailwind for TSMC
Meanwhile, These dynamics vide Taiwan Semiconductor with enormous leverage, as the company is able to command a premium for its fabrication and foundry services
Moreover, Taiwan Semi represents a more agnostic apach to in the AI chip space, in this volatile climate
Said differently, TSMC stands to benefit from more secular trends fueling chip demand as opposed to a specific company's ducts being in demand over the competition
Through the first half of 2025, TSMC's revenue soared by 40% year over year
That level of growth is astonishing, and the company might actually have a path to sustain it
According to a study from management consulting firm McKinsey & Company, investment in AI infrastructure could reach $6 (quite telling), in today's market environment. 7 trillion by next decade, considering recent developments
Nearly half of this spending is jected to be allocated toward hardware for AI data centers
Not only does this imply that demand for chips is strong, but the subtle idea is that foundry services such as those offered by Taiwan Semi aren't going away anytime soon
Given AMD's new chip architectures, combined with Nvidia's competing ducts and the rise of custom silicon from cloud hyperscalers, I'm confident that Taiwan Semi will be operating from a position of strength for years to come (an important development), in today's market environment
Moreover, In contrast, TSM PE Ratio (Forward) data by YCharts Nevertheless, at 24 times forward earnings, TSMC stock trades for a discount compared to historical valuation levels -- and that's including the recent rebound in the stock price over the last month or so, given current economic conditions
Nevertheless, To me, Taiwan Semi is a bargain opportunity right now and I think the stock could be a surprise winner during the second half of the year (which is quite significant)
Nevertheless, Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors
Nevertheless, Adam Spatacco has positions in Meta Platforms and Nvidia, in today's market environment
The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing, given the current landscape
This analysis suggests that Motley Fool recommends Broadcom, in light of current trends
What the re reveals is Motley Fool has a disclosure policy.
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