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.