The market is currently back at its peak levels, and a number of leading AI companies are included in this rise. Yet, it’s essential to remember that another potential market drop might still occur.
Let’s look at three top AI stocks that have made strong runs that would be good buys on a pullback.
1. Palantir
As an observer, I find myself drawn to Palantir Technologies (PLTR), a company with a substantial valuation yet brimming with promising growth prospects. This stock seems particularly appealing during potential dips, as it has solidified itself as one of the most captivating AI growth tales on the market today. The momentum behind this company is accelerating at an impressive pace.
During the initial three months, Palantir experienced seven straight quarters of escalating income, marking a 39% increase in total earnings. This surge is primarily driven by its U.S. commercial divisions, where sales skyrocketed by 71% and the worth of upcoming contracts surged an impressive 127%.
Instead of engaging in discussions about who’s creating the top AI model, Palantir concentrates on a much more tangible aspect: making AI beneficial. Their Artificial Intelligence Platform (AIP) applies AI models to address real-life challenges effectively.
The AIP system collects data, ties it to real-world assets and business processes, enabling businesses to leverage AI more effectively. Consequently, this versatile platform is increasingly being employed for a wide range of tasks such as hospital monitoring for sepsis, insurance underwriting by insurers, and optimization of pipeline infrastructure by energy companies.
A significant portion of the company’s income comes from the U.S. government, which is increasingly adopting AI technology for improved efficiency. In the last quarter alone, Palantir’s earnings from the government sector rose by 45%.
Additionally, the business has secured a significant contract with NATO, broadening its horizons into global defense sectors. This move comes at a time when Europe is increasing military expenditure. As a result, it now has three potential avenues for expansion: local commercial ventures, U.S. government contracts, and international public sector opportunities.
Absolutely! While Palantir appears pricey according to conventional valuation methods, it seems to be positioning itself as a potential future mega-cap. This means that any temporary dip might offer an excellent chance for investment.
2. Nvidia
Nvidia Corporation (NVDA) continues to be a significant player in market growth, as recent developments have favorably impacted its position. A positive change occurred when the U.S. government announced that it would relax export controls on chips, enabling Nvidia to resume selling its H20 chips to China once more. This decision is expected to significantly boost the company’s revenue by several billions of dollars.
Nvidia continues to hold the top spot in AI infrastructure, primarily because its graphics processing units (GPUs) serve as the foundation for rapid development. Notably, Nvidia has expedited its development process to maintain its leading position.
For the last two years, Nvidia’s data center earnings have skyrocketed from a starting point of $4.3 billion to over $39 billion, showcasing remarkable expansion for such a large corporation. In the initial quarter alone, it commanded nearly 92% of the Graphics Processing Unit (GPU) market share.
As a tech enthusiast, I can’t help but be awestruck by the incredible success of this brand, and it’s not just about those irresistible chips. What truly sets them apart is their CUDA software, a revolutionary tool they developed back in 2006. Initially created to broaden the scope of Graphics Processing Units (GPUs) beyond enhancing video game graphics, this free platform has become a game-changer, driving innovation and growth across various industries.
In contrast to other sectors, Nvidia strategically introduced CUDA into academic and research communities, where initial AI studies were taking place. This move encouraged developers to create applications directly on CUDA, resulting in a steadily expanding set of tools and libraries tailored to boost GPU performance for artificial intelligence tasks.
If Nvidia’s stock prices decrease, prepare for an opportunity to invest. The growth in data center expenditure is significant, and the company stands to benefit significantly from it. Additionally, with the increasing popularity of autonomous and intelligent vehicles, Nvidia also has a promising market prospect in the automotive sector.
3. Microsoft
A different firm experiencing a surge in stock value is Microsoft (MSFT), which holds a significant position in the enterprise software sector due to its Microsoft 365 line of productivity tools for workers, as well as being among the top players in the cloud computing industry with Azure.
The cloud segment continues to be the company’s most rapidly expanding sector, having achieved revenue growth of 30% or more for seven consecutive quarters. During the last quarter, Azure’s revenue surged by 33% (35% when adjusted for currency fluctuations), with approximately half of that increase stemming from artificial intelligence services. The growth could have been even greater, but Microsoft has encountered limitations due to capacity constraints.
In fiscal year 2026, it intends to significantly increase investments in infrastructure (capital expenditures or capex), with an emphasis on acquiring GPUs and servers. They stated that these resources are more closely linked to AI revenue compared to purchasing the buildings where they’re housed. This seems like a shrewd decision that should bolster the ongoing growth of cloud computing.
Microsoft’s $10 billion investment in OpenAI has provided it with a significant advantage in the field of artificial intelligence, primarily due to Azure initially securing exclusive rights to use OpenAI’s leading large language models (LLMs). This appeal of these AI models continues to draw in other companies, and Azure offers its clients direct interaction with them.
I’ve noticed that they’ve integrated OpenAI’s models across their entire system for the operation of their Copilot service, which is steadily growing in recognition among businesses. At $30 monthly for each business user, it presents a substantial potential benefit.
The OpenAI partnership has become more complex due to changes in the agreement. With the exclusivity clause now void, both parties are reportedly working out new terms, as the AI provider considers restructuring. However, Microsoft still maintains a 49% stake in OpenAI Global’s earnings, up to a tenfold return on their investment. This could mean a significant financial gain for Microsoft.
Microsoft maintains a robust, long-term standing. Its current surge in value makes it an appealing choice for investment during market dips.
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2025-07-19 13:49