2 Artificial Intelligence (AI) Stocks That Could Dominate the Rest of 2025

Advanced Micro Devices (AMD) and Amazon (AMZN) shares are rising, driven by specific catalysts; AMD's revenue is accelerating due to its AI chip leadership, with the MI350 GPU promising significant performance improvements and strong customer interest, while Amazon is benefiting from increased robotics in its fulfillment centers, potentially boosting margins. AMD reported a 36% year-over-year revenue increase in Q1, and analysts project 20% EPS growth in 2025 and 44% in 2026, while Amazon's Q1 earnings increased 62% year-over-year, with its robotic initiatives gaining Wall Street's attention.

Analysis

Advanced Micro Devices (AMD) and Amazon (AMZN) are experiencing significant share price appreciation, underpinned by distinct technological catalysts and strong financial performance. AMD's stock has surged 61% from its April 52-week low, driven by its prominent role in supplying artificial intelligence (AI) chips to data centers. The company demonstrated accelerating growth with a 36% year-over-year revenue increase in the first quarter, an improvement from 24% in the fourth quarter of 2024. Key drivers include the MI300 chip, which amassed $5 billion in revenue in 2023, and the anticipated launch of the MI350 GPU, which promises 35 times more throughput than the MI300x and has garnered strong customer interest, including a large-scale deployment by Oracle and a new agreement with Saudi Arabia's HUMAIN. AMD management also projects the launch of its MI400 chip in 2026 and maintains confidence in a $500 billion long-term addressable market, despite potential chip export control pressures. Analyst consensus forecasts EPS growth of 20% in 2025 and 44% in 2026, with the stock trading at a forward price-to-earnings (P/E) multiple of 31. Concurrently, Amazon's shares have rebounded 42% from their 52-week low, supported by a 62% year-over-year increase in earnings in the first quarter. Amazon's strategic advantage stems from its expanding use of robotics, with over 750,000 units across its fulfillment network and initiatives like testing humanoid robots for last-mile delivery, which could significantly enhance margins given that last-mile delivery typically constitutes over half of total shipping costs. Wall Street is increasingly recognizing this potential for substantial productivity gains and margin improvement, with analysts expecting record earnings for Amazon in 2025 and 2026; the stock currently trades at 35 times 2025 earnings estimates. The article also notes, however, that a separate "Motley Fool Stock Advisor" analyst team did not include AMD among its top 10 current buy recommendations.

Key Decisions for Investors

• Investors should consider AMD's accelerating revenue (36% YoY in Q1) and strong AI chip pipeline, including the MI350 with its 35x performance improvement and significant customer engagements like Oracle and HUMAIN, as supportive of its forward P/E of 31 against projected EPS growth of 20% in 2025 and 44% in 2026.
• Amazon's robust 62% YoY Q1 earnings growth and its expanding robotics initiatives, which target major cost efficiencies and productivity gains, suggest its valuation at 35 times 2025 earnings estimates offers potential for further appreciation as these strategic benefits materialize.
• Given the significant share price appreciation already realized from 52-week lows for both companies (AMD +61%, AMZN +42%), investors should diligently monitor upcoming earnings reports, product milestones, and competitive developments to ensure continued execution against the prevailing high growth expectations.