3 Best Artificial Intelligence (AI) Stocks to Buy in January

One of the most important topics in the stock market in 2024 was artificial intelligence (AI)which is showing signs of becoming a breakthrough technology. That said, it appears that AI is still in its infancy, and 2025 still promises many opportunities for the industry.

Let’s look at three AI stocks to buy this month.

Nvidia (NASDAQ: NVDA) Arguably, it has been the biggest winner in AI as its revenue has absolutely skyrocketed over the past two years. In fiscal year 2024, which ended in January last year, its revenue grew by 125%, while in fiscal year 2025, its revenue will double once again.

That of the company graphics processing units (GPU) they are the backbone of building AI infrastructure due to the impressive processing speed of GPUs, which is needed to handle the training of large language models (LLM) and AI inference. Meanwhile, it amassed a 90% market share in the GPU space over its rival Advanced microdevices because of its superior CUDA software platform, which includes microlibrary and development tools that allow its chips to be easily programmed to handle various AI-related tasks.

Spending on AI infrastructure only continues to accelerate as LLMs require more and more computing power to train. Meanwhile, Nvidia’s biggest customer Microsoft (NASDAQ: MSFT) announced that it would spend about $80 billion this calendar year on AI data centers.

Typically, about half of that spend goes to servers with GPUs. By comparison, during its most recent fiscal year that ended in June, Microsoft spent $44.5 billion on capital expenditures (capex). With other big customers also increasing capex spending on AI infrastructure this year, Nvidia still has a lot of growth ahead of it.

Despite its strong stock performance, Nvidia is trading at a forward price-to-earnings (P/E) ratio of around 31.5, based on analyst estimates in 2025, and a price-to-earnings-growth (PEG) ratio of of 0.98. A PEG of less than 1 is generally considered undervalued, and growth stocks often trade at PEGs well above 1.

Artistic representation of the data center. — Image source: Getty Images.

Microsoft plans to spend big on AI infrastructure this year, and for good reason. The company’s cloud computing unit, Azure, has been a big AI winner, showing revenue growth of 33% last quarter, while its use of Azure OpenAI doubled in the past six months Azure is a consumption model, and customers use its services to help build their own AI agents and applications. This is also leading to greater use of its analytics and data services.

While Azure has shown strong growth, it could be even more robust if not for capacity constraints. It has already forecast that Azure revenue will begin to accelerate in the second half of its fiscal year as more capacity comes from past capex spending. Meanwhile, it’s pouring tons of money into building data centers around the world to try to keep up with demand.

In addition to cloud computing, the company also has a big opportunity for AI software with its AI assistant co-pilots for its Microsoft 365 suite of productivity tools. For $30 a month for business use, Microsoft offers AI copilots for its range of productivity tools that can do things like organize and prioritize emails, create PowerPoint presentations using only natural language, and even use the Python programming language in Excel using only natural language directions These AI co-pilots can save workers a lot of time and should be a huge growth driver for the company moving forward.

Trading at a P/E of 32.5 estimates for the current fiscal year, the stock is reasonably valued.

Salesforce (NYSE: CRM) seeks to become the leader in agentic AI, which is believed to be the next evolution of AI beyond generative AI. With generative AI, users can create content via a message, such as asking ChatGPT to create a vacation itinerary. Agentic AI would take it to the next level by going out on their own and booking everything needed for that vacation, including flights, hotels, dinner reservations, and tour guides.

The company, a longtime leader in customer relationship management (CRM) software, launched its AI agent platform Agentforce in October, with an enhanced version announced in mid-December. The platform offers a variety of predefined agents that users can customize using its no-code and low-code tools, while customers will also be able to build their own agents from scratch. Agents are available in areas such as sales, marketing, recruiting, and customer service, among others.

Salesforce has seen rapid adoption of Agentforce, with the company saying in early December it had shut down 200 teams, while by mid-December it said it had shut down more than 1,000. It has projected that it will have 1 billion Agentforce AI agents deployed by the end of its 2026 fiscal year (through January 2026). Agentforce is a consumer product that costs $2 per conversation, so this is a huge opportunity for the company.

The stock currently trades at a fair value of 29 times fiscal 2026 earnings and a PEG of 0.8.

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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Microsoft, Nvidia and Salesforce. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has one disclosure policy.

3 Best Artificial Intelligence (AI) Stocks to Buy in January was originally published by The Motley Fool

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