These Artificial Intelligence (AI) Stocks Have Quietly Outperformed the Market All Year
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Wondering where AI's real winners are hiding? They might not be the ones you'd expect, though the names should be familiar.
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July 2, 2025
07:41 AM
The Motley Fool
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Wondering where AI's real winners are hiding
They might not be the ones you'd expect, though the names should be familiar
Some artificial intelligence (AI) stocks inspire tons of headlines
You bably know exactly what Nvidia (NVDA 2. 62%) and Microsoft (MSFT -0. 20%) are doing in the AI space, whether their stocks are doing well or not
And then there's the quiet bunch
I can assure you that IBM (IBM -1. 31%) and Micron nology (MU 0. 70%) do plenty of AI-related, and that they stand to benefit from this boom in generative AI
Their stocks have been outperforming the S&P 500 (^GSPC 0. 47%) in 2025, apart from a couple of short-d glitches
But how often do you see them mentioned among the top AI stocks to own for the long haul
Not a whole lot, I bet
So let me tell you what these veterans are doing to earn consistently market-beating performance this year -- without dominating the press
How Micron is stealing the AI spotlight Micron is not the largest memory-chip maker in the world, but it has an advantage over sector leaders SK Hynix and Samsung (SSNL. 01%) right now
The Idaho-based chip maker is first to market with the fourth generation of high bandwidth memory (HBM) -- a key component in the and greatest AI accelerator platforms
Samsung and Hynix have their own HBM4 solutions, but Micron is already shipping these chips to its most important customers
AI hardware leader Nvidia (NVDA 2. 62%) includes Micron's HBM4 memory on its Blackwell family of AI accelerators
Runner-up AMD (AMD 1. 68%) also selected Micron's top-of-the-line memory for its next two generations of Instinct accelerators
As a result, Micron's market is growing while Samsung is sliding back
Now, Micron's sales are limited by the company's in-house duction capacity, as the HBM chips are sold out for the rest of 2025
That's why Micron has invested $10. 2 billion in capital expenses over the last three quarters, up from $5. 3 billion in the same year-ago period
These costly chip-factory upgrades will be the foundation of Micron's long-term growth opportunity
So Micron is a leading supplier of AI-grade memory solutions
The stock has gained a market-beating 47% in the first half of 2025
IBM's not so secret weapon: Consulting services Do you still see IBM as a one-stop shop for corporate computing needs
That would be a mistake
The company refocused on AI, cloud computing, and consulting services long before it was cool
The strategy shift led to many years of disappointing holder returns, but the big payoff is finally coming in
And of course, Big Blue's fortunes are built around AI
In the recent first-quarter, IBM posted an order book of more than $6 billion in the WatsonX generative AI service
That's up from roughly $1 billion in the year-ago quarter
And here's the fun part -- only 20% of this incoming contract portfolio comes from software licenses
The rest springs from consulting services
Image source: Getty Images
This is a unique advantage
IBM's nical expertise goes far beyond its own software tools
When your company's employees need training on a new nology, or hands-on expertise from IT consultants, you're ly to look at IBM's consulting services
Yes, other giants can support their in-house software and services, but they're less ly to offer broad nology support
This isn't a new trend
Before the Fool, two different employers sent me to IBM's training centers around the country to keep me up to date with networking standards and gramming tools
That was 20 years ago and nothing has changed -- except IBM's heavier focus on high-value topics such as AI systems and cloud computing
IBM's stock has gained 33% in 2025, and the underlying results were largely based on consulting services in the AI market
If you knew that five minutes ago, you were already ahead of the game
If not, you just earned an edge on most AI investors
Anders Bylund has positions in International Machines, Micron nology, and Nvidia
The Motley Fool has positions in and recommends Advanced Micro Devices, International Machines, Microsoft, and Nvidia
The Motley Fool recommends the ing options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft
The Motley Fool has a disclosure policy.
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