321 Reasons to Buy AI Stocks Right Now

Artificial intelligence (AI) stocks have led the S&P 500 to tremendous gains in recent years. Leaders in the space, such as Nvidia and Alphabet, are heavily weighted in the index; therefore, their momentum helped propel it to an increase of 78% over the past three calendar years, and the benchmark now is heading for a 12% increase in 2026.

The reason for such AI excitement is simple. The technology has the potential to reshape the way business is done, and this could propel earnings significantly higher. AI may also boost innovation — for example, making it faster and easier for pharma and biotech companies to discover lifesaving drugs. So, investors bought shares in these players early in the growth story, hoping to score a significant win. In many cases, they won their bet as AI stocks surged in the double and triple digits.

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Over the past year, however, certain concerns have slowed the pace of AI stocks. They have still gained but have experienced periods of stagnation and even declines. Nvidia sank in the first quarter, then rebounded and is now heading for a 25% annual gain. This is positive, but pales in comparison to the stock’s 400% increase over three years.

Investors have worried that the current level of investment in AI infrastructure isn’t sustainable — and that any slowdown could crush AI stocks. So you may be thinking twice before you press the buy button, even when it comes to leading AI stocks. Against this backdrop, though, there are 321 reasons to buy AI stocks right now. Let’s zoom in for a look.

Image source: Getty Images.

Investing in AI infrastructure

First, it’s important to consider the headwinds that have interfered with AI stocks‘ momentum this year. As mentioned, tech companies are investing heavily in infrastructure to keep up with soaring demand for chips, networking equipment, and overall capacity for AI workloads. Industry leaders Meta Platforms, Alphabet, Amazon, and Microsoft together pledged to spend nearly $700 billion on the build-out this year alone.

Some of these players already are delivering explosive growth thanks to AI. For example, Amazon’s cloud computing unit, Amazon Web Services, has reached a $169 billion annual revenue run rate, driven by demand for AI products and services. Still, investors have worried that the enormous levels of investment today may overshoot the revenue opportunity down the road. At the same time, concerns about economic growth and rising inflation, as well as potential for additional rate hikes following the recent one, have hurt demand for growth stocks.

Talking about AI

Now, let’s turn to the 321 reasons to buy AI stocks right now. And this actually refers to 321 companies. According to FactSet Insight, “AI” was pronounced at least once during the earnings calls of 321 S&P 500 companies between June 15 and Aug. 28. Why is this important? It suggests that these players are involved at least somewhat in the space or are talking about potentially applying AI to their businesses. The figure is large enough to show significant interest in AI, yet the fact that it’s less than 500 leaves room for growth — the players that haven’t yet spoken about AI may be just getting started in AI or will be adopters of the technology down the road.

Considering the actual development of AI, it’s important to keep in mind that we are in the early days of its application to the needs of companies across industries. This means that the revenue opportunity — for the developers and users of AI — is just beginning.

It’s true that AI stocks have soared during the initial stages of the AI boom, as models were trained and the potential uses of AI were explored. But the adoption of AI by more and more companies should supercharge the revenue opportunity. All of this means that, with 321 S&P 500 companies talking about AI, it’s a good idea to buy quality AI stocks and hold on for the long term as the revenue opportunity expands.

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Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

321 Reasons to Buy AI Stocks Right Now was originally published by The Motley Fool