The artificial intelligence (AI)-driven astonishing bull run of 2023 and 2024 has suffered major hurdles in 2025. The highly overstretched valuation of U.S. stocks, stocks inflation, several weak economic data, geopolitical conflicts and severe concerns related to the Trump administration’s tariff and trade policies significantly dented market participants confidence in risky assets like equities.
The technology sector has suffered the most since these stocks, especially the AI-focused ones, have skyrocketed in the last two years. Meanwhile, the current low valuation of these stocks provides a good opportunity for investors.
Here we recommend five Internet-based AI stocks with a favorable Zacks Rank to buy on the dip. These stocks are: Arista Networks Inc. ANET, Fastly Inc. FSLY, Five9 Inc. FIVN, HubSpot Inc. HUBS and Twilio Inc. TWLO. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks year to date.
Zacks Investment Research
Image Source: Zacks Investment Research
Arista Networks Inc.
Arista Networks is well-positioned with the right network architecture for client-to-campus data center cloud and AI networking backed by three guiding principles. These include the best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms.
ANET’s EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Its AI suite also focuses on network security and optimization.
ANET’s AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration.
Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. The growing demand for 200- and 400-gig high-performance switching products augurs well for ANET’s long-term growth.
Arista Networks has an expected revenue and earnings growth rate of 18.7% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% in the last 30 days. ANET is currently trading at a discount of 31.6% from its 52-week high price.
Fastly Inc.
Fastly provides infrastructure software offering cloud computing, image optimization, security, edge computer technology and streaming solutions. On Dec.16, 2024, FSLY unveiled Fastly AI Accelerator, a semantic caching solution that allows developers to optimize their LLM (large language model) generative AI applications.
FSLY operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. FSLY’s Edge Cloud Platform offers more efficient performance as developers need only a single line of code instead of repeated calls to the AI provider to update their application to a new API endpoint.
Fastly has an expected revenue and earnings growth rate of 8.7% and 16.7%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 9.1% over the last 30 days. FSLY is currently trading at a discount of 40.5% from its 52-week high price.
Five9 Inc.
Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, enabling a broad range of contact center-related customer service, sales, and marketing functions.
FIVN’s platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces.
FIVN has been benefiting from the growing adoption of AI tools in its call center services, with personalized AI agents emerging as a major growth driver. On Feb. 19, Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space. FIVN also released new Five9 AI agents tailor-made for Google Cloud.
Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the last 30 days. FIVN is currently trading at a discount of 47.6% from its 52-week high price.
HubSpot Inc.
HubSpot provides a cloud-based customer relationship management platform for businesses in the Americas, Europe, and the Asia Pacific. HUBS is witnessing steady multi-hub adoption from enterprise customers in the premium market. Pricing optimization in HUBS’ starter edition is leading to solid client additions in the lower end of the market.
The integration of HubSpot AI, which includes state-of-the-art features, such as AI assistance, AI agents, AI insights and ChatSpot, is driving more value to customers. HUBS’ seat pricing model lowers the barrier for customers to get started with its business and mitigates pricing friction for upgrades. The growing adoption of inbound applications is a tailwind.
HubSpot has an expected revenue and earnings growth rate of 15.4% and 14.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% in the last 30 days. HUBS is currently trading at a discount of 30.2% from its 52-week high price.
Twilio Inc.
Twilio is a leading provider of cloud communications Platform-as-a-Service (PAAS) in the United States and internationally. TWLO is focusing on generative AI offerings to tap the growing opportunities in this space.
In this regard, TWLO launched Customer AI technology in June 2023, which powerfully combines customer engagement platform data, generative and predictive AI, and LLMs to unlock stronger customer relationships for brands.
TWLO is integrating generative AI capabilities across its platform and every customer touch point. The company believes that by training LLMs for customers with their data inside its Segment customer data platform, Twilio will be able to help customers enter the AI race multiple steps ahead of their peers.
TWLO has also partnered with Alphabet Inc. (GOOGL) for Google Cloud to integrate generative AI into the Twilio Flex customer engagement platform. Twilio’s initiative to integrate generative and predictive AI technology across its platform is likely to boost its revenue growth over the long-run.
Twilio enables companies to create personalized, customer-aware experiences powered by OpenAI. Through this integration, Twilio customers will be able to use OpenAI’s GPT-4 model to power new generative capabilities in Twilio Engage, its multichannel marketing solution built on the Segment Customer Data Platform.
Twilio has an expected revenue and earnings growth rate of 7.8% and 22.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.1% in the last 30 days. TWLO is currently trading at a discount of 25.3% from its 52-week high price.
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