AI Stocks Show Promise for Growth in Second Half of 2025
Amazon and Alphabet are poised for strong growth in AI stocks as market sentiment improves.
Key Points
- • AI stocks faced challenges in H1 2025 due to tariffs and investor concerns.
- • Positive sentiment boosts the market outlook for AI stocks in H2 2025.
- • Amazon's diverse sourcing and AWS strength position it for recovery.
- • Alphabet's ad revenue and cloud services growth enhance its investment appeal.
As of mid-July 2025, AI stocks are witnessing a revival after a challenging first half of the year. Investor concerns over growth and recent tariff discussions have hampered the performance of many companies engaged in artificial intelligence, leading to declines in major indices like the S&P 500 and Nasdaq. However, recent positive market sentiment suggests a potential rebound, particularly for key players in the sector.
Amazon and Alphabet are being highlighted as leading contenders for significant growth moving into the latter half of 2025. Despite a stagnant performance in the first half, Amazon's diverse product sourcing and robust Amazon Web Services (AWS) business position it to effectively counter anticipated tariff impacts. The company has seen sustained demand as customers increasingly pursue AI solutions.
Alphabet, while struggling with a stock decline exceeding 6% earlier in 2025, has rebounded impressively—gaining over 20% since April. This upswing is largely attributed to their revenue from advertising and Google Cloud services, which reported a remarkable 28% increase to over $12 billion last quarter. Notably, Alphabet's current valuation remains attractive at 18 times forward earnings, enhancing its appeal for investors.
With the ongoing boom in AI applications, both Amazon and Alphabet are well-positioned to leverage their market dominance and innovative capabilities as the second half of 2025 unfolds.