logo
Prediction: These 2 AI Stocks Will Rebound in the 2nd Half

Prediction: These 2 AI Stocks Will Rebound in the 2nd Half

Globe and Mail2 days ago
Key Points
One of these stocks finished the first half unchanged, and the other fell in the double-digits.
Both represent great long-term bets, and at today's reasonable prices, are ripe for a rebound.
10 stocks we like better than Amazon ›
Over the past two years, investors put their money into an industry set to become the next big thing in technology: artificial intelligence (AI). This billion-dollar market is set to reach into the trillions in a few years as it potentially changes the way business is done and how our daily lives are organized. All of this is great news for companies that get in early and play a key role, and investors, recognizing this, drove these stocks higher.
But, earlier in the first half, many of these players lost their momentum. Investors worried that President Trump's import tariffs would hurt economic growth -- and that made any high-growth industry, such as AI, vulnerable. AI stocks and other growth players led declines in April on these concerns. In recent weeks, though, signs have emerged that headwinds may not be as strong as expected -- the U.S. has been negotiating tariffs with other countries, for example -- and this has helped optimism return to the stock market. The S&P 500 even reached record highs in recent days.
Now, my prediction is the following two AI stocks -- one that stagnated and another that fell in the double-digits in the first half -- will rebound in the second half of the year.
1. Amazon
Amazon (NASDAQ: AMZN) stock, after rising early in the year and dropping on import tariff concerns in April, then began to rebound -- and finished the first half unchanged. Today, there's reason to believe the positive momentum will continue and this stock will climb in the second half.
It's important to remember that Amazon is a well-established leader in both e-commerce and cloud computing and has delivered earnings growth over many years. So, investors who may have been a bit skittish about investing a few months ago may feel more comfortable with Amazon than with a newer player that hasn't yet proven itself. The company also revamped its cost structure a few years ago, a move that helped it through the challenge of higher inflation and that should help it face other cost challenges in the future -- such as import tariffs.
Amazon also is well positioned to benefit as the AI boom continues as the company is a user and a provider of AI. In e-commerce, Amazon uses AI across its fulfillment network to gain in efficiency, lowering its cost to serve. And Amazon Web Services (AWS), the cloud business, offers customers a wide range of AI products and services -- from chips to a fully managed service that gives users access to AI models they can tailor to their needs. All of this has helped AWS reach a $117 billion annual revenue run rate.
Right now, Amazon trades for 36 times forward earnings estimates, a reasonable price that could attract investors in the second half -- and help this top AI stock to rebound.
2. Apple
Apple (NASDAQ: AAPL) has faced two problems in recent times. The company has been slower than other tech giants to adopt AI, and it also is viewed as a player that may suffer the most from import tariffs due to its reliance on production abroad -- most iPhones have generally been manufactured in China.
All of this has weighed on Apple stock, and in the first half, the shares fell 18%. Though the headwinds haven't disappeared, the situation is improving. Apple is in the early days of its Apple Intelligence growth story, meaning this array of AI features could offer a catalyst for growth in the quarters to come. And, as mentioned above, trade negotiations are happening -- it's also important to note that the U.S. is unlikely to make decisions that would destroy the earnings potential of one of its biggest companies. Apple is the third-largest in market value after Nvidia and Microsoft.
And, like Amazon, Apple is a company that's proved itself over time, delivering many years of earnings growth into the billions of dollars. It also has a solid brand moat, with customers flocking to the iPhone -- the world's No. 1 smartphone -- regardless of the price or wait time for the latest release. Investors looking for a growth pick that doesn't come with a great deal of risk may notice these points.
Finally, this established leader also has a newish growth driver, and that's services revenue. Now that it has more than 2.2 billion devices active worldwide, these devices, are bringing in recurrent revenue through services subscriptions -- from cloud storage to digital content.
All of this could prompt investors to set aside near-term challenges and get into Apple today at a bargain 29 times forward earnings estimates -- and that could power shares of this solid long-term stock higher in the second half.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!*
Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 21, 2025
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. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, and Nvidia. 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.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Detroit Three lobbying group criticizes deal favouring Japanese imports
Detroit Three lobbying group criticizes deal favouring Japanese imports

CBC

time21 minutes ago

  • CBC

Detroit Three lobbying group criticizes deal favouring Japanese imports

Social Sharing Shares of General Motors, Ford Motor, and Stellantis some of the biggest automakers in the U.S., rallied on Wednesday after news of a trade deal that will reduce tariffs on imported Japanese cars, as investors saw it as a sign of more deals to come. But the companies are not celebrating. Automakers importing vehicles into the U.S. from Japan now face a 15 per cent levy, according to terms of the deal outlined on Tuesday by U.S. President Donald Trump, down from 27.5 per cent. GM shares rallied 9 per cent and Stellantis rose 12 per cent, as market watchers said they anticipated further agreements could reduce other trade barriers that have hurt the companies' profits. Ford shares rose about 2 per cent. The automaker is less exposed to tariffs because it produces more of its U.S.-sold vehicles domestically. On Wednesday, the European Union and United States were nearing a trade deal that would also set a 15 per cent tariff on European imports. GM, Ford and Stellantis have been paying up to 25 per cent on vehicles imported from Mexico or Canada, depending on how much U.S. content is in the vehicles. The companies are concerned they could soon be paying higher tariffs on vehicles assembled in Mexico or Canada than on vehicles with significantly less U.S. content made in Japan or the United Kingdom. WATCH | U.S., Japan reach trade deal with 15% tariffs on imported Japanese goods: U.S., Japan reach trade deal with 15% tariffs on imported Japanese goods 22 hours ago Some lobbyists also expressed alarm that if South Korea strikes a similar deal with the U.S., it could become a low-cost market to assemble cars and trucks. "They could be the new Mexico," one lobbyist told Reuters. The American Automotive Policy Council, which represents the Detroit Three, criticized the deal, saying it creates an easier path for Japanese imports than for some cars built in North America. Even before Tuesday's deal, Detroit automotive executives raised concerns that Trump's trade policy could end up giving an edge to foreign automakers who do not invest as heavily in U.S. manufacturing. "This is a bonanza for our import competitors," Ford CEO Jim Farley said in February, when Trump initially proposed levies on Mexico and Canada, but not on major automotive centers such as South Korea. The United Auto Workers union, which represents workers at the Detroit Three automakers, said it was "deeply angered" by the deal. "What we've seen so far makes one thing clear: American workers are once again being left behind," the union said in a statement on Wednesday evening. Th Japan trade announcement came the same day General Motors said tariff costs knocked $1.1 billion USD from its bottom line, hurt by a battery of levies including 25 per cent taxes on imports from Canada and Mexico, and 50 per cent on steel and aluminum imports. Industry consultant and former GM executive Warren Browne said the Japan deal "put all vehicles produced in Mexico and Canada by the Detroit Three at a disadvantage," because they face higher levies than Toyota vehicles shipped in from Japan, for example. That could allow the foreign brands to undercut U.S. car companies on price. The Windsor Assembly Plant could be in trouble if tariffs don't disappear, as company posts losses: Auto expert 3 days ago Toyota, Subaru and Mazda are among the most reliant companies on Japan-produced vehicles for their U.S. sales, and stand to benefit most from the lower tariffs, according to business-analytics firm GlobalData. Toyota imported roughly 500,000 vehicles from Japan last year. Japanese automotive stocks soared after the trade deal announcement. Autos Drive America, which represents those Japanese automakers along with other foreign car companies operating in the United States, on Wednesday praised the trade deal, saying it would lead to further factory investment in the U.S. Treasury Secretary Scott Bessent warned, however, that non-compliance by Japan on the trade agreement would result in a return to the higher tariff rate. "We'll evaluate (compliance) every quarter and if the president's unhappy then we'll boomerang it back to the 25 per cent tariff rate, both on cars and the rest of their products," he said in an interview on Fox News.

onsemi and Schaeffler Expand Collaboration with New EliteSiC-based PHEV Platform
onsemi and Schaeffler Expand Collaboration with New EliteSiC-based PHEV Platform

Toronto Star

time22 minutes ago

  • Toronto Star

onsemi and Schaeffler Expand Collaboration with New EliteSiC-based PHEV Platform

SCOTTSDALE, Ariz., July 24, 2025 (GLOBE NEWSWIRE) — onsemi (Nasdaq: ON) today announced an expanded collaboration with leading motion technology company Schaeffler through a new design win that leverages onsemi's next-generation EliteSiC product line of silicon carbide MOSFETs. The onsemi solution will power the Schaeffler traction inverter for a leading global automaker's cutting-edge plug-in hybrid electric vehicle (PHEV) platform. onsemi's EliteSiC technology offers significantly lower conduction losses and superior short-circuit robustness, enabling a compact, thermally efficient inverter design that enhances overall system performance. This silicon carbide-based solution offers the lowest on-state resistance to provide highest peak power compared to other SiC solutions in its class. These benefits allow Schaeffler to deliver an innovative traction inverter system that achieves measurable benefits to the end customer, including:

Cognizant's AI Lab Records 59th U.S. Patent, Continuing to Generate AI Breakthroughs
Cognizant's AI Lab Records 59th U.S. Patent, Continuing to Generate AI Breakthroughs

Cision Canada

time22 minutes ago

  • Cision Canada

Cognizant's AI Lab Records 59th U.S. Patent, Continuing to Generate AI Breakthroughs

In 2025, the Lab has yielded two new U.S. Granted Patents, open-sourced a key AI development platform, and earned a Gold Award from GECCO TEANECK, N.J., July 24, 2025 /CNW/ -- Cognizant (Nasdaq: CTSH) today announced that its AI Lab has been granted two new U.S. patents and a gold award for a research paper on "Realizing Human Expertise through AI" presented this month at GECCO (Genetic and Evolutionary Computation Conference) in Malaga, Spain. "Being granted two new U.S. patents in the first half of 2025—bringing our AI Lab's U.S. total to 59 with 23 more patents pending—underscores our relentless pace of innovation," said Babak Hodjat, CTO of AI at Cognizant. "Couple this with a Gold Award at GECCO and these milestones reflect our deep commitment to pioneering transformative AI technologies and turning cutting-edge ideas into real-world impact." The two latest patents highlight key innovations from Cognizant's AI research: U.S. Patent No. 12,282,845 (issued on April 22, 2025) covers a method for Multi-objective Coevolution of Deep Neural Network Architectures, aimed at improving model performance and resource efficiency. The method's application ranges from medical image classification to natural language processing. U.S. Patent No. 12,292,944 (issued on May 6, 2025) outlines a method for optimizing loss functions through Taylor Series Expansion, aiming to improve training efficiency and enhance model robustness, especially is data-limited scenarios. 1 These innovations, developed by Cognizant's researchers including Dr. Jason Liang, Dr. Elliot Meyerson and Professor Risto Miikkulainen, reinforce Cognizant's leadership in pushing the boundaries of AI and machine learning. To make the promise of artificial intelligence both more practical and broadly accessible, earlier this year, Cognizant's AI Lab open sourced its Neuro AI Multi-Agent Accelerator. Neuro AI helps businesses accelerate their development and adoption of AI agents, transforming their business processes for adaptive operations, real-time decision-making, and personalized customer experiences tailored to client-defined objectives and oversight. The Cognizant AI Lab, which opened its San Francisco-based flagship AI research facility in March 2024, has also been honored with the Gold Award for Human-Competitive Results at GECCO 2025 for its groundbreaking work on RHEA (Realizing Human Expertise through AI). Developed by Dr. Elliott Meyerson and Professor Risto Miikkulainen RHEA employs evolutionary AI to distill and recombine hundreds of models generated by human expert teams—most notably those submitted to the XPRIZE Pandemic Response Challenge—into refined decision strategies. In a rigorous evaluation, RHEA surpassed the performance of individual human submissions, realizing the latent potential even in incompletely developed human ideas, resulting in innovative pandemic policy recommendations. This milestone underlines Cognizant's leadership in harnessing global human expertise to drive next‑generation AI solutions. Risto Miikkulainen, VP of Research and Professor of Computer Science at UT Austin, said, "RHEA is a powerful example of how evolutionary AI can amplify global human intelligence—not just by matching expert solutions, but by going beyond them to discover novel, high-impact strategies. This recognition by the Humies Award committee reinforces the promise of population-based AI as a foundation for solving the world's most complex challenges." About Cognizant Cognizant (Nasdaq: CTSH) engineers modern businesses. We help our clients modernize technology, reimagine processes and transform experiences so they can stay ahead in our fast-changing world. Together, we're improving everyday life. See how at or @cognizant. About the Cognizant AI Lab The mission of the Cognizant AI Lab is to maximize human potential with Decision AI, a form of AI that combines generative AI, multi-agent architecture, deep learning, and evolutionary AI to create sophisticated decision-making systems. Decision AI powers Cognizant's Neuro ® AI platform, which is utilized by Fortune 500 companies and non-profits to discover new ways to exceed their goals. The platform enables organizations to rapidly build AI that optimizes decision-making, leading to revenue growth and societal progress. Led by AI pioneers Babak Hodjat and Risto Miikkulainen, the lab collaborates with institutions, academia, and technology partners to develop groundbreaking AI solutions responsibly. With over 120 patents (issued or pending) globally, the lab excels at combining scientific innovation with commercial application. It supports Cognizant's goal of improving everyday life, focusing on business and AI-for-good applications.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store