Investing in two AI Stocks with Potential Million-Dollar Returns
**Article: AI-Focused Stocks: Alphabet and Applied Materials**
In the rapidly evolving world of artificial intelligence (AI), two stocks stand out as compelling additions to long-term AI-focused portfolios: Alphabet (GOOG/GOOGL) and Applied Materials (AMAT).
**Alphabet (GOOG/GOOGL):**
Alphabet, the parent company of Google, is well-positioned in AI and cloud computing, key drivers of future growth. Expert analysis highlights Alphabet’s continued strength and rapid expansion in AI technologies and cloud services, reinforcing its potential as a long-term winner in the AI space. Growth forecasts for late 2025 indicate rising stock prices, with projections showing Alphabet reaching $285-295 per share by November-December 2025, implying double-digit percentage gains from current levels.
Current price predictions suggest a modest near-term dip or flat period, with some forecasts indicating prices around $172 to $177 per share by mid-2025, slightly below the current price of approximately $180. However, the medium-term outlook towards the end of 2025 shows potential strength and price targets closer to $285-295, implying room for upside. The market sentiment is generally bullish but includes some caution, reflected in a Fear & Greed index indicating fear and moderate volatility.
Google's legacy business model, such as Google Search, may face challenges due to the preference for interacting with lifelike AI models. However, the company is not resting on its laurels. Google has deployed numerous new capabilities across its services to fight against AI competitors, including the Gemini chatbot, video and image creators, deep research, AI overviews in Google Search, and Google Lens.
**Applied Materials (AMAT):**
Applied Materials is a critical player in the semiconductor industry, which underpins AI hardware advancements. It is forecasted to benefit significantly from increased AI-related semiconductor demand, positioning it as a strong growth stock in this thematic area. Although specific price targets were not detailed, Applied Materials is noted as trading at reasonable prices relative to its growth outlook, making it an attractive buy for investors seeking exposure to AI hardware development.
Applied Materials is a highly profitable business that has generated positive free cash flow every year for the last two decades. Its stock trades at a reasonable P/E ratio of 22, making it an attractive investment for long-term growth. However, Applied Materials' China business has been affected by import restrictions, contributing to a decrease from 43% of revenue a year ago to 25% today.
**A Complementary Pair**
For a long-term AI-focused portfolio, Alphabet offers a blend of AI/cloud-driven growth with a strong competitive moat and reasonable medium-term price appreciation potential, while Applied Materials provides exposure to semiconductor growth indispensable for AI infrastructure at attractive valuations. Both stocks complement each other well within such a thematic investment strategy.
In summary, the current growth prospects and reasonable price points for Alphabet (GOOG/GOOGL) and Applied Materials (AMAT) suggest both stocks remain attractive for long-term AI-focused portfolios based on their strong future potential and valuation metrics.
Investing in the tech-driven future, artificial intelligence (AI) specifically, presents an opportunity with Alphabet (GOOG/GOOGL) and Applied Materials (AMAT). Alphabet, with its strong position in AI and cloud computing, is forecasted to reach $285-295 per share by late 2025, offering double-digit percentage gains. Applied Materials, a critical player in the semiconductor industry, stands to gain from increased AI-related semiconductor demand, trading at reasonable prices for long-term growth. Together, these AI-focused stocks, Alphabet and Applied Materials, can complement each other in a long-term thematic investment strategy, providing exposure to AI growth, infrastructure, and hardware advancements.
