Millions of businesses and individuals now use artificial intelligence (AI) tools like ChatGPT on a daily basis. Despite impressive growth over the last 12 to 24 months, the AI revolution has just begun.
Estimates vary, but nearly every forecaster is expecting seismic growth in the technology and the demand for it over the next decade. The United Nations Trade and Development organization, for example, believes AI will become a $4.8 trillion industry by 2033, up from just $189 billion in 2023.
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In early 2025, many AI stocks experienced brief corrections. No one knows what will happen next, but it's not hard to see the three AI businesses below soaring in value before the year is up.
Nvidia is still the king of artificial intelligence
If you want to make sure your portfolio is exposed to growth in AI, buying stock in Nvidia(NASDAQ: NVDA) is a no-brainer. In my view, no other company is as directly exposed to the explosion of AI technologies.
Nvidia doesn't specialize in developing AI products or services. Instead, it manufacturers graphics processing units (GPUs). These chips allow developers to process the massive amounts of data necessary to train and execute AI models and other machine-learning tasks.
Without GPUs, today's AI revolution likely would not be occurring. And right now, Nvidia is dominating the space with an 80% to 95% market share for GPUs related to AI-specific tasks.
Past chip revolutions suggest that the competition will eventually catch up to Nvidia's capabilities, eating into its dominant market share. But the company has a secret weapon: CUDA, a developer platform that allows customers to customize its chips for specific applications.
CUDA entrenches users into its software and hardware system, resulting in high customer loyalty.
The stock may look pricey at 18.4 times sales, but that's actually well below its trailing-five-year average. And sales growth remains strong, making this a great long-term pickup on the correction.
Most people may not think of Microsoft(NASDAQ: MSFT) or Amazon(NASDAQ: AMZN) as AI companies. But apart from Nvidia, these two businesses are arguably the best positioned in terms of AI exposure. That's not due to Amazon's sprawling e-commerce business or Microsoft's Office suite. Instead, it's because of each company's cloud computing segments.
Amazon calls this division Amazon Web Services (AWS); Microsoft's is Azure. And as we'll see, these two business segments are driving forces behind much of what is happening in the AI space today.
The biggest group buying Nvidia's GPUs are not AI companies themselves, but cloud computing businesses like AWS and Azure. Cloud infrastructure is essentially a distributed computer that can scale up or down at the press of a button -- a perfect modular solution for AI companies looking to test and deploy their products.
With 30% and 24% market shares, respectively, AWS and Azure dominate the cloud computing space, and thus the AI space when it comes to actually building and delivering these services to customers.
Cloud computing is superior by far to building out independent computing infrastructure for every AI company. And with more resources to invest in top-notch products like Nvidia's GPUs, AWS and Azure should have no issue maintaining their large market shares, keeping them at the center of the AI revolution for years to come.
Neither company is growing as quickly as Nvidia, given their more diversified business models. In exchange, investors receive much lower valuations. As the artificial intelligence space grows larger and larger over the years, expect the market to value these businesses more like crucial AI suppliers than the fairly diversified conglomerates they are today.
Should you invest $1,000 in Nvidia right now?
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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. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, 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.
