AI Stocks Show Potential Amid Market Recovery

NEW YORK, NY — The first half of 2025 saw numerous artificial intelligence (AI) stocks struggle as investors pulled back from high-growth companies. Concerns about President Donald Trump’s import tariffs fueled fears that prices would rise, affecting consumer buying power and corporate profits.

As a result, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all saw declines in April. However, investor sentiment has recently improved, aided by initial trade deals with the U.K. and China, alongside assurances from major technology firms about ongoing capital spending.

Despite the uncertain tariff landscape, several companies have optimistic long-term prospects, presenting opportunities for investors, especially in AI stocks.

Amazon‘s stock trended negatively through the first half, showing no growth and ending at $225.53. Investors worried tariffs could hamper e-commerce and Amazon Web Services (AWS) as higher prices might lead customers to cut back on spending.

Nonetheless, Amazon’s extensive product range and numerous sourcing options give it flexibility to adapt to changing market conditions. Observers note that AWS customers are likely to maintain spending on AI technology, helping to combat concerns about demand drops.

Additionally, Amazon has a history of effectively adjusting its cost structure during challenging economic periods, which could position it well against future cost pressures from tariffs.

AWS stands to benefit from the ongoing AI infrastructure buildout, maintaining continued earnings growth. With a valuation now at 35 times earnings—down from over 40 times—investors may find Amazon an attractive investment option.

Similarly, Alphabet’s stock fell over 6% in the first half but has rebounded since hitting its lowest point in April, experiencing a more than 20% increase recently. Improving market sentiment could drive further gains.

Alphabet has consistently demonstrated its growth capabilities through the success of its Google platform and Google Cloud services. The advertising revenue from Google provides a secure income stream, while Google Cloud’s wide array of services is also lucrative.

AI technology is central to Alphabet’s strategy, enhancing user search experiences and facilitating better advertising targeting. This could encourage advertisers to increase their spending on Google’s platforms.

In its latest quarter, Google Cloud reported a remarkable 28% revenue growth, surpassing $12 billion. The foundational importance of AI will likely sustain this upward momentum.

With a current valuation of just 18 times forward earnings, Alphabet stands out as a compelling buy for investors seeking a top AI stock with growth potential in the latter half of 2025.