Best-Performing AI Stocks to Buy in 2025

​Over the past year, AI stocks have experienced significant volatility. For instance, Nvidia's stock surged over 90% in 2024, driven by record-breaking revenue and strong demand for its AI solutions. Similarly, Microsoft's stock climbed 60% in 2024, buoyed by growth in its AI and cloud computing divisions. Alphabet's stock rose 50% in 2024, driven by increased revenue from AI-driven services. 

However, recent U.S.-China tariff tensions have led to market declines, with the Nasdaq entering bear market territory, affecting major tech stocks, including Nvidia, Microsoft, and Alphabet. Looking ahead, the AI sector is expected to continue its growth trajectory, though investors should remain cautious of geopolitical and economic factors influencing stock performance.​

Here are the top 5 best-performing AI stocks that are worth keeping an eye on for potential growth and investment opportunities.

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Palantir Technologies Inc. (PLTR) specialises in advanced data analytics and AI integration. The company has secured significant government contracts, including a projected U.S. Army contract for the Next-Generation Command and Control (NGC2) programme, potentially adding S$100 million in annual recurring revenue. 

Palantir's commercial segment has also shown growth, with a 22% year-over-year increase in Foundry platform deployments across various industries. For Singapore investors, Palantir's stock is accessible through platforms like Tiger Brokers and Moomoo.​

​Upstart Holdings, Inc. (UPST) is an AI-driven lending platform transforming consumer lending by leveraging artificial intelligence to assess credit risk. However, rising interest rates and market volatility pose risks, potentially dampening loan demand and affecting loan performance. Singapore investors considering UPST for growth portfolios should conduct thorough research, balancing potential returns with inherent risks.​

​Twilio Inc. (TWLO) offers AI-enhanced customer engagement through its communication APIs, solidifying its position in the SaaS/CPaaS sector post-pandemic. While recent stock performance has been positive, investors should consider inherent volatility and assess alignment with long-term investment objectives. ​

​SoundHound AI Inc. (SOUN) specialises in voice AI and natural language processing, competing with tech giants like Amazon, Google, and Apple. Despite a 575% stock surge in 2024, its limited financial resources and high R&D costs pose challenges. Given these factors, SOUN may suit risk-tolerant investors seeking exposure to emerging AI technologies.

SAP SE (SAP), a leading European enterprise software company, integrates AI into its ERP and business analytics solutions. This strategic move enhances operational efficiency and positions SAP as a key player in AI-driven enterprise solutions. The company offers a stable investment option, providing an annual dividend of €2.35 per share, yielding approximately 0.87%. This combination of AI innovation and consistent dividends makes SAP an attractive choice for Singaporean investors seeking AI exposure with reduced volatility.​

Artificial intelligence (AI) stocks refer to companies that operate within the AI industry and typically fall into one of three categories: enablers, engagers, or enhancers.

Enablers develop AI technologies and provide the infrastructure essential for AI operations. An example is Oracle, a dividend-paying blue-chip stock that has partnered with Singapore's defense technology arm to offer cloud computing and AI services, enhancing secure data processing capabilities. ​

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Engagers incorporate AI into their products and services to enhance user experiences. Grab, a leading Southeast Asian super app, collaborates with OpenAI to integrate AI across its platform, improving services like ride-hailing and food delivery. ​

Enhancers build upon existing AI technologies to offer specialised solutions. Pand.ai develops AI chatbots for enterprises, enhancing customer engagement through natural language processing. Noodle Factory provides AI-powered teaching assistants, transforming educational experiences with adaptive tutoring. ​

Investing in AI stocks involves several strategic steps to optimise your portfolio. Firstly, select an online brokerage that provides access to U.S. and global markets; platforms such as Tiger Brokers, Saxo, Moomoo, and Interactive Brokers are popular choices. 

These brokers often offer fractional investing options, allowing you to purchase portions of high-priced stocks, which is particularly beneficial for diversifying into AI companies without significant capital. ​

When opening an account, ensure you understand the process of funding and consider brokers that offer multi-currency accounts to save on foreign exchange fees. For instance, Interactive Brokers allows funding in multiple currencies, assisting seamless trading across different markets. Additionally, platforms like DBS Vickers provide fractional trading in U.S. stocks, enabling investments with as low as USS$5. ​

It's crucial to assess your risk profile, given the inherent volatility in AI stocks and the cyclical nature of the technology sector. Position AI investments as a growth allocation within your portfolio, rather than as core defensive holdings, to align with your long-term financial goals. 

By carefully selecting a brokerage platform and aligning your investment strategy with your risk tolerance, you can effectively participate in the growth of AI technologies from Singapore.

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Investing in Artificial Intelligence through Exchange-Traded Funds (ETFs) offers Singapore investors a diversified and cost-effective approach to capitalise on the AI sector's growth. ETFs typically encompass a broad range of companies involved in AI, providing exposure to various industry players and reducing the risks associated with investing in individual stocks.​

Top AI ETFs Accessible to Singapore Investors:

• Global X Robotics & AI ETF (BOTZ): This ETF focuses on companies that could benefit from increased adoption of robotics and AI, including those involved in industrial robotics, automation, and autonomous vehicles.

• iShares Robotics and AI Multisector ETF (IRBO): IRBO provides exposure to companies at the cutting edge of robotics and AI innovation across multiple sectors. ​

• ROBO Global Robotics and Automation ETF (ROBO): This fund tracks companies driving innovations in robotics, automation, and AI.

Singapore investors can purchase these ETFs through online brokerage platforms such as Tiger Brokers, Saxo, Moomoo, and Interactive Brokers, which provide access to U.S. and global markets. When selecting an ETF, consider factors like expense ratios, liquidity, and performance history to ensure alignment with your investment objectives and risk tolerance. 

Additionally, be mindful of currency conversion fees and other associated costs when investing in foreign-denominated ETFs.

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The rapid surge in AI investments has raised concerns about a potential AI bubble. Similar to the dot-com bubble of the late 1990s, current AI valuations appear inflated, with prices soaring without corresponding improvements in underlying fundamentals. This phenomenon is representing past market periods where speculative investments led to significant crashes. ​

Media hype contributes to a herd mentality, encouraging investors to pour money into AI ventures without fully understanding the technology's limitations. This mirrors the behaviour observed during the dot-com era, where fear of missing out (FOMO) led to widespread overvaluation. ​

However, unlike the dot-com bubble, today's technology stocks often focus on real-world applications and profitability, with substantial cash reserves reducing the risk of liquidity crises. Additionally, AI technologies like ChatGPT are experiencing rapid adoption, indicating sustained demand beyond short-term hype. ​

For Singaporean investors, it's crucial to avoid succumbing to hype-driven investments. Diversifying portfolios can mitigate risks associated with AI market volatility. Focusing on long-term growth trends rather than short-term fluctuations aligns with solid investment strategies, ensuring resilience against potential market corrections.

Investing in AI stocks in Singapore offers promising opportunities due to the high-growth potential AI presents across multiple sectors. AI is transforming industries such as healthcare, finance, and manufacturing, leading to substantial market opportunities for companies at the cutting edge of AI technologies. 

Additionally, the long-term demand for automation, efficiency, and data-driven insights ensures that AI's relevance will continue to expand, benefiting investors who tap into this evolving market.

However, investing in AI stocks also comes with notable risks. The volatility of smaller-cap AI stocks can result in significant price swings, which might be difficult for risk-averse investors to stomach. 

Furthermore, ethical concerns surrounding AI, including issues like job displacement and the need for stronger regulations, add an element of uncertainty that could affect the long-term prospects of AI investments.

For Singaporean investors, a cautious approach is essential. It’s wise to invest only what you can afford to lose, given the speculative nature of many AI stocks. A dollar-cost averaging (DCA) strategy, where you invest a fixed amount regularly, can help mitigate the impact of market fluctuations and reduce the risk of entering the market at an unfavourable time. 

Additionally, using Singapore’s Central Provident Fund (CPF) and Singapore Exchange (SGX) for core, lower-risk savings, while reserving AI stocks for higher-risk, satellite investments, creates a balanced portfolio. Staying informed about U.S. market trends and earnings seasons is also key to making timely investment decisions.

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