2 No-Brainer AI Stocks to Buy Right Now

Key Points

• Alphabet's advantage in AI can be easily seen in Google Cloud's strong growth.

• AI wouldn't be possible without the chip-making expertise of Taiwan Semiconductor Manufacturing.

• 10 stocks we like better than Alphabet ›

Investors can't afford to miss the opportunity going on in artificial intelligence (AI) right now. AI growth is expected to eventually add over $15 trillion to the global economy, according to PwC. Investing in the tech firms that supply cloud computing services and AI chips is a great way to profit from this opportunity.

Here are two no-brainer AI stocks to consider buying now.

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Image source: Getty Images.

1. Alphabet (Google)

Cloud computing is a hot market right now, as companies move data over to cloud platforms to take advantage of AI services. Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Cloud is soaking this demand up. The stock surged to new highs this year as investors started to recognize Google as a sleeping giant in the AI arms race.

Google Cloud makes up a small part of Alphabet's business. But it's the company's fastest-growing business, with revenue up 32% year over year in the second quarter. Importantly, this strong growth is starting to pull profits up, with Google Cloud's operating profit more than doubling year over year to $2.8 billion for the quarter.

Google Cloud's growth is just getting warmed up. Companies must adopt AI or risk falling behind in an increasingly competitive landscape where this technology is accelerating the rate of innovation. With most enterprise data still stored on on-premise servers, Google Cloud has a lot of room to grow in the years to come.

Google Cloud is already a preferred platform for AI startups, but it's also winning deals with large enterprises. Google's competitive advantage is based on its proprietary AI models (Gemini) and computing systems powered by its custom-designed Tensor Processing Units (TPUs). These systems are optimized for AI inference, where computer models learn to make forecasts from new data without human input. The AI inference market is expected to be much larger than AI training, which has driven much of the growth in AI over the past few years.

Google already has one of the most valuable brands in the world, based on billions of people who use Search and other services every day. Its integration of AI into both its consumer and enterprise services should yield excellent returns for investors over the next 10 years.

2. Taiwan Semiconductor Manufacturing

If Taiwan Semiconductor Manufacturing (NYSE: TSM) disappeared tomorrow, the global economy would likely collapse. It's the largest chip manufacturer by a wide margin. It makes chips for several of the leading semiconductor companies. TSMC's customers use these chips to power just about everything that makes the economy function: smartphones, cars, computers, data centers, and consumer electronics.

TSMC is in such a dominant position in the chip supply chain that it's kind of frightening. Geopolitical tensions between China and Taiwan pose a risk, but TSMC is also in the process of diversifying its manufacturing base across the world. It is building new facilities in the U.S., Europe, and elsewhere.

TSMC is No. 1 in chip making because it has better expertise, a large manufacturing capacity, and superior chip-making equipment than competitors. It has great relationships with customers that depend on TSMC to manufacture the most advanced chips for high-performance computing.

Advanced chips, or those that are 7-nanometer and below, made up nearly three-quarters of its revenue in Q2. It generated $45 billion in net income on $106 billion of revenue over the last year. That's a stellar profit margin of 43%.

Management expects 2025 revenue to be up 30%, indicating surging demand for AI chips. It expects demand for AI chips to grow at over 40% annually through 2029.

The stock is up 36% so far in 2025, and excluding a meltdown in the stock market, it should hit new highs in 2026 and for many more years. Demand for semiconductors is not slowing down, making Taiwan Semiconductor stock a no-brainer stock to buy and hold.

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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.