These Artificial Intelligence (AI) Stocks Are Quietly Outperforming the Market

Globe and Mail

20 hours ago

Key Points
Investors have had their eye on big AI names such as Nvidia and Palantir, two stocks that have soared.
But other AI investing opportunities exist, and the following two that delivered in the first half could continue to climb.
10 stocks we like better than Oracle ›
The S&P 500 has recovered and advanced after a rough patch in the middle of the first half. Investors, initially worried about the impact of President Trump's import tariffs at home, are feeling more optimistic that the economy and companies can manage the challenge. As a result, they've once again started piling into the growth stocks that led indexes higher last year, from Nvidia to Palantir Technologies.
But while these companies are attracting a lot of attention, they aren't the only ones that have benefited from positive sentiment in recent days. In fact, two artificial intelligence (AI) stocks in particular have been quietly outperforming the market. They've climbed in the double digits since the start of the year, while the S&P 500 has advanced a little more than 6%. Let's check out these market-beating players.
Oracle
Oracle (NYSE: ORCL) stock has jumped 38% since the start of the year, buoyed by demand from AI customers. You may associate Oracle most with database management software, and that was the company's bread and butter for years, but Oracle has built upon those strengths -- adding cloud infrastructure and related services to its offerings.
In fact, Oracle recently said it's on track to become the world's top cloud application company and one of the biggest cloud infrastructure players, with a total cloud growth rate to increase from 24% in the recently completed fiscal year to 40% in this new fiscal year. This is music to the ears of customers looking to build AI platforms as well as those seeking general cloud capacity. During the recent quarter, a customer asked Oracle for all available capacity -- regardless of the location -- and regarding this level of demand, Oracle co-founder Larry Ellison said he's "never seen anything remotely like this."
Customers also like Oracle because it offers them a multicloud experience, or the ability to leverage the Oracle database and accomplish their projects across many clouds. So they don't have to choose just one cloud. Multicloud database revenue from Amazon, Alphabet 's Google Cloud, and Microsoft Azure, surged 115% last quarter from the previous quarter, and the company expects this triple-digit growth to continue.
All of this, along with the idea that the general AI market is expected to reach into the trillions in the coming decade, should drive Oracle's earnings and share price higher. So this AI stock may have what it takes to outperform the market over the long term.
CrowdStrike
CrowdStrike Holdings (NASDAQ: CRWD) has seen its shares advance 39% this year, recovering and going on to gain after a major challenge last July. A bug in a software update led to the world's biggest information technology outage -- halting everything from air travel to scheduled surgeries as CrowdStrike customers couldn't access data. The AI-driven cybersecurity giant took immediate action to remedy the problem, showing its proactive nature, and maintained solid relationships with most customers.
Of course, the incident weighed on earnings as CrowdStrike offered customers compensation packages, and this effort continues to represent a headwind. But in spite of this, CrowdStrike has continued to grow, and its Falcon Flex system, allowing customers to pick and choose CrowdStrike services as needed, has been a big growth driver.
In the recent quarter, Falcon Flex deals surpassing $3.2 billion increased by more than six times year over year. Total revenue and annual recurring revenue both increased in the double digits, and net cash from operations reached a record level of more than $384 million. The company predicts Falcon Flex deal momentum will boost annual recurring revenue and margin expansion in the second half of the year. Another reason to be optimistic? CrowdStrike just announced a $1 billion share repurchase authorization, a sign it's confident in its future.
So as CrowdStrike's earnings continue to recover from the outage last year -- and as growth potentially accelerates -- this AI cybersecurity company may continue to roar higher, making it a top growth stock to own in the second half.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon and Oracle. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Microsoft, Nvidia, Oracle, and Palantir Technologies. 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 a disclosure policy.