Prediction: These 2 AI Stocks Will Rebound in the 2nd Half
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.
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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.
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Globe and Mail
24 minutes ago
- Globe and Mail
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Globe and Mail
24 minutes ago
- Globe and Mail
Better Buy: Dogecoin or Shiba Inu? The Answer Might Surprise You.
Key Points Dogecoin was the cryptocurrency industry's original meme token, whereas Shiba Inu was created to piggyback on its success years later. Both cryptos are trading way below their record highs, but they have soared during the past month on the back of new government legislation. Dogecoin and Shiba Inu are highly speculative assets, so investors should proceed with caution. 10 stocks we like better than Dogecoin › The website CoinGecko tracks nearly 17,000 different cryptocurrencies, and last week, their combined value topped $4 trillion for the first time ever. Bitcoin alone accounts for $2.4 trillion of that value, and it continues to march to new highs, but even some of the most speculative meme tokens are participating in the recent rally. Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB) have soared by 73% and 37%, respectively, during the past month. President Donald Trump's pro-crypto agenda continues to pick up steam, which is driving demand for coins and tokens from all corners of the industry. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Last week, Congress passed the Genius Act, which lays out a new regulatory framework for stablecoins. And then there is the Clarity Act, which would shift crypto regulation from the Securities and Exchange Commission to the smaller Commodity Futures Trading Commission if it wins enough votes in the Senate. Can Dogecoin and Shiba Inu convert this sugar high from Washington into sustainable upside, and if so, which one is the better buy for the long term? Read on for the surprising answer. The case for Dogecoin In 2013, two friends named Billy Markus and Jackson Palmer believed the cryptocurrency industry was taking itself too seriously. Inspired by the popular Doge meme -- featuring a Shiba Inu dog -- that was spreading across the internet at the time, they launched Dogecoin. The entire exercise was a joke (in their own words), but that didn't stop their creation from reaching a peak market capitalization of about $90 billion in 2021. The coin's ascension was a community effort, but one person had more influence over its performance than any other: Tesla Chief Executive Officer Elon Musk. He started publicly supporting the meme token in 2019 and consistently promoted it with amusing posts on social media in the years that followed. On May 8, 2021, Musk participated in a Dogecoin-themed comedy sketch during an episode of Saturday Night Live. The token surged to a record high of $0.73 that night, but when investors realized Musk had no plan to create concrete value, they abandoned ship. Dogecoin lost more than 90% of its value by mid-2022, and it remained dormant in 2023 and for most of 2024 -- until Trump was elected president in November. Musk was a big supporter of Trump's campaign, and once elected, the president appointed him to run an external agency called the Department of Government Efficiency, which is tasked with reducing wasteful spending to address the national debt. The agency's name shortens to DOGE, which caused Dogecoin to more than triple in value to a new 52-week high of $0.47 on speculation that Musk might have a new plan for his favorite cryptocurrency. Its momentum faded when it became clear that Dogecoin would play no role in the agency. Despite its 73% gain during the past month, the token currently trades at just $0.28. If the Clarity Act creates a friendlier regulatory environment for all cryptocurrencies, as expected, it might pave the way for new uses for meme tokens like Dogecoin. Any development that drives sustainable adoption could send it soaring, but it's unclear whether that will actually happen. The case for Shiba Inu Shiba Inu is another popular meme token, but it did something in 2021 that no other financial asset -- let alone a cryptocurrency -- has ever done: It generated an annual return of 45,278,000% that year, which would have been enough to turn a perfectly timed investment of just $3 into over $1 million. An anonymous developer named Ryoshi created Shiba Inu in late 2020 to ride the same speculative wave that was driving Dogecoin higher. It was actually dubbed the "Dogecoin killer" by investors who were optimistic it could overtake its older rival in popularity. Shiba Inu didn't have an influential figure like Elon Musk in its corner, but its rapidly rising value prompted a flurry of top exchanges like Coinbase and Binance to add it to their platforms, which made it accessible to troves of new investors. Then, like Dogecoin, Shiba Inu lost more than 90% of its peak value once the hype wore off in 2022. It still hasn't found a legitimate use in the real world, so most recovery attempts have faltered. It's too volatile for businesses to accept as payment for products and services, and it certainly isn't a good store of value since it's still trading 83% below its record high. Moreover, Shiba Inu has a supply problem. There are 589.2 trillion tokens in circulation, which is why it trades at a tiny price per token of $0.000015. If it were to rise to $1 per token, for example, it would result in a market capitalization of $589.2 trillion, which would make it the most valuable asset in the entire world by a wide margin. At that level, Shiba Inu would be worth roughly 19 times more than the annual output of the entire U.S. economy, which was $29.7 trillion last year. There is no obvious catalyst that could spark another historic rally in Shiba Inu, but like Dogecoin, it could benefit from any deregulatory efforts that pave the way for new uses. The surprising verdict Shiba Inu's enormous circulating supply is very slowly shrinking as some investors are voluntarily burning the coins. Dogecoin, on the other hand, has a potentially infinite supply -- a capped amount of new tokens are mined each year, but there is no end date, which means existing investors will be diluted until the end of time. For that reason, if I had to invest in one of these meme tokens, I would probably pick Shiba Inu. However, I would actually recommend that investors avoid both of them. The fact that neither of them have reclaimed their all-time highs from 2021 highlights the pitfalls of investing in speculative assets. With no concrete fundamentals to support the value of Dogecoin or Shiba Inu, not only is a recovery unlikely, but they will probably trend lower over the long term. Investors who want some exposure to cryptocurrencies should probably consider an industry leader like Bitcoin instead. Should you invest $1,000 in Dogecoin right now? Before you buy stock in Dogecoin, 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 Dogecoin 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 $641,800!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,023,813!* Now, it's worth noting Stock Advisor's total average return is 1,034% — 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
Globe and Mail
24 minutes ago
- Globe and Mail
2 Artificial Intelligence (AI) Stocks to Buy Before They Soar 100% and 184%, According to Wall Street Analysts
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Brian Nowak at Morgan Stanley recently increased his 12-month bull-case target price on AppLovin to $700 per share. That implies 100% upside from its current share price of $350. Here's what investors should know about Palantir and AppLovin. Palantir Technologies: 184% implied upside Palantir develops data analytics software that lets customers integrate, secure, and make sense of complex information. Its adjacent artificial intelligence platform, AIP, functions as a large language model orchestration tool that supports the automation of data analytics workflows with generative AI. Forrester Research recently ranked Palantir as a leader in AI platforms. Importantly, Palantir's platforms create a feedback loop that not only optimizes decision-making, but also identifies increasingly relevant insights over time. The company says its ontology-based software -- which links data to real-world assets -- is unique in its ability to operationalize AI. 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AppLovin: 100% implied upside AppLovin is an adtech company that has traditionally helped game developers market, monetize, and analyze their applications. But the company has more recently expanded its addressable market by introducing adtech software for e-commerce brands. Importantly, AppLovin has differentiated itself with what Morgan Stanley calls a "best-in-class machine learning ad engine." To elaborate, AppLovin's recommendation engine (called Axon) leans on sophisticated AI models to match advertiser demand with the most appropriate publisher supply through auctions, thereby helping brands maximize return on ad spend. It benefits from a network effect. As more companies use Axon, AppLovin collects more data that further enhances the capabilities of its targeting engine. AppLovin reported encouraging first-quarter financial results. Revenue surged 40% to $1.4 billion, as strong momentum in the advertising segment offset a sales decline in the mobile games segment. Meanwhile, GAAP earnings increased 149% to $1.67 per diluted share. The company guided for 69% advertising sales growth in the second quarter. Importantly, while AppLovin has traditionally been a managed service, the company is now testing a self-service platform that affords brands greater control. CEO Adam Foroughi told analysts: "It will take a few quarters to refine these tools for broader release. But when we launch self-service globally, we expect it to unlock a massive opportunity." Wall Street expects AppLovin's earnings to grow at 55% annually through 2026. That makes the current valuation of 64 times earnings look reasonable. It is possible for the stock to return 100% in the next year, as Morgan Stanley projects in its bull-case scenario, but patient investors should feel comfortable owning the stock even if that doesn't happen. Should you invest $1,000 in Palantir Technologies right now? 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