AI Portfolio

3 AI Stocks That Could Double in 2025

Eric Bleeker

Published: January 12, 2025 1:58 pm

Last Updated: January 12, 2025 2:00 pm

After AI had its “iPhone moment” with the release of ChatGPT in late 2022, leading stocks in the space have seen phenomenal returns.

For example, NVIDIA (Nasdaq: NVDA) gained 239% in 2023 and 171% in 2024.

Other AI stocks with massive returns last year included: Applovin (Nasdaq: APP) up 735%, Palantir (Nasdaq: PLTR) up 356%, Credo Technologies (Nasdaq: CRDO) up 266%, and Broadcom (Nasdaq: AVGO), up 114%.

Clearly, AI is a trend moving at a fast enough pace that new winners are emerging, but which ones could stand out in 2025?

3 AI Stocks That Could Double in 2025

At 24/7 Wall St., we’ve created a $500,000 AI Portfolio where you can get actionable trade alerts on our top AI stock ideas. You can read more about how to follow along with the portfolio here.

If you’re looking to catch up, in last week’s AI Investor Podcast we conducted a full portfolio review that detailed how each stock we’ve recommended fits into the portfolio and their opportunities in the AI space.

We also detailed three of our top picks for stocks that could double in 2025. You can listen to the episode below through Apple podcasts or Spotify.

Major AI Stories to Watch in 2025

Some of the biggest AI storylines to watch in 2025 include:

• AI Model Breakthroughs: OpenAI recently released their new ’03’ reasoning model that uses reasoning to provide answers that are a genuine breakthrough. For example, in benchmark tests o3 scores better than 99.95% of human programmers. It can also solve many of the most advanced math questions ever devised by humans. You can learn more about o3 in the video below.

• While many investors have been predicting a slowdown in AI headed into 2025, 03 points toward another round of investment as leading AI companies push the limits of these new reasoning models. Finding stocks that can be advantaged from reasoning models could be a way to see significant profits in 2025.
• Agents: AI agents promise to be the next evolution in the space. Agents will be able to autonomously handle tasks with little prompting, creating significantly more capability and usefulness for end users. Investing in agents will be difficult as they could be extremely disruptive to companies in enterprise software. However, picking the right stocks that see significant growth from the rise of agents could lead to outstanding returns.
• Data Center Boom: If emerging capabilities in reasoning AI models keep spending in red-hot, that means companies providing networking and other in-demand products like liquid cooling for next-generation data centers should continue seeing strong gains. As an example, Broadcom soared 42% in December after they revealed their addressable market size could be significantly larger than investors expected in their latest earnings call.

One Market to Watch: Memory

In our $500,000 AI Portfolio, we’ve made bets on all of these stories for 2025. Let’s zoom in on one area that could benefit strongly from AI model breakthroughs: memory.

New AI reasoning models use long context lengths. Without getting too technical, reasoning models have a ‘chain of thought’ that allows them to think step-by-step through a problem.

This structure provides far better answers from AI systems, but it also is significantly more memory intensive.

Memory has long been a space that investors don’t want to touch. In the 1980s and 1990s Japan invested heavily to dominate the memory market. However, memory is extremely cyclical and that bet backfired as most of the champion companies they created failed or later sold off their memory businesses.

Like many semiconductor markets, memory used to be crowded with dozens of companies but the cost to stay at the cutting edge has whittled the space down to a few companies.

All that remains in cutting-edge memory is three companies: Samsung, SK Hynix, and Micron (Nasdaq: MU).

Why Memory Stocks Could Double in 2025

Competition in the main memory market (DRAM) remains fierce and extremely cyclical. Despite growing demand thanks to AI, Micron saw its share price drop around 40% from mid-June to early August as fears of an oversupply in DRAM memory grew.

However, there’s a new development in the memory space which could change competitive dynamics throughout 2025. AI systems require a specialized type of memory product called ‘High-Bandwidth Memory,‘ or HBM.

HBM stacks memory directly on top of the AI processors created by companies like NVIDIA and Broadcom. It’s more complex, but this also makes HBM far more capable in AI workloads.

With HBM being complex, some of the dominant memory makers are staying near the cutting-edge while others struggle to keep up with advances.

For example, Samsung used to be the most dominant memory maker, but it has fallen behind in HBM. That’s a tough competitive position to be in. For example, NVIDIA has been unable to qualify Samsung’s memory for use in its systems. With NVIDIA continuing to push advancements in the space at a dizzying pace, falling behind is an existential risk. If Samsung can’t produce today’s HBM3 memory, it will likely struggle as the industry advances to mass production of the next generation of technology (HBM4E) next year.

SK Hynix has filled in the gap created by Samsung being behind in HBM technology and Micron is working to catch up. In addition, the ‘advanced packaging’ required to stack memory chips in HBM creates other investing opportunities if you know the right places to look.

Our bet: With OpenAI’s new reasoning model having just been released on December 20th, the market is still underestimating the vast investment in memory that will need to take place in the coming years. This is a fantastic place to look for companies that could double in 2025.

Our Picks for 3 Stocks That Could Double in 2025

Keeping what we described in the memory space above, here are three stocks we believe could double in 2025.

Camtek

Camtek (Nasdaq: CAMT) is a small $4 billion company that creates inspection systems for semiconductors. Their specialty is for 3D systems such as high-bandwidth memory.

This specialty is proving lucrative as Camtek is one of the companies with the highest revenue contribution from the growth of AI. About 50% of sales come from high-performance computing (which is AI) and another 20% comes from other markets using advanced packaging.

How could Camtek double in 2025? The company is down significantly from its 2024 peak when it hit $140.50 last July. Camtek has sold off alongside most semiconductor equipment companies as fears of further restrictions of chip sales to China grew.

There remains significant geopolitical uncertainty heading into 2025, but we’re also getting a significantly better price to buy Camtek thanks to it. In addition, the fear of rising interest rates has led the market to sell off many stocks that are seen as risky; this includes small caps and stocks that have seen strong recent appreciation like Camtek.

Interest rate risk will be a continuing storyline throughout 2025, and I wouldn’t be surprised to see the Nasdaq entire correction territory this month. Yet, macro fears often lead to companies selling off regardless of underlying business quality. This could create even further opportunities to add Camtek shares.

Right now, Wall Street forecasts Camtek will book 14% sales growth this year leading to adjusted earnings of $158 million. If our prediction is correct and recent breakthroughs in AI lead to a significant pull forward in demand for high-bandwidth memory, we believe Camtek could surpass these estimates.

As a thought exercise, if Camtek’s forward earnings estimates hit $200 million, it would be trading for just 20X earnings despite having one of the most significant growth runways in semiconductors with its growth tied directly to AI spending.

We think that’s an extremely positive risk/reward and Camtek is near the top of stocks we’re looking to add to the portfolio next.

SK Hynix

We’re sticking with high-bandwidth memory for our second idea, which is SK Hynix.

SK Hynix’s business has been on an absolute tear. Revenues more than doubled from $22.2 billion in 2023 to an estimated $45 billion last year. Analyst estimates have growth remaining red hot in 2025, with revenue forecast to grow 28% while profits grow 46%.

So, with all this success, what is SK Hynix trading for? A paltry 5.4X next year’s estimated profits! 

If you’ve been investing long enough, you know that there are no “free lunches” where companies growing by astounding rates also trade for bargain bin prices. And sure enough, even while SK Hynix’s revenue doubled last year its share price underperformed the market. The company saw just a 9% return in 2024.

There are a few reasons for SK Hynix’s sluggish performance in the face of such astounding business results:

• People Afraid of Memory Investments: As we noted earlier, most semiconductor investors have been burned investing in memory stocks, which are deeply cyclical. We appreciate how cyclical memory stocks can be, but believe the market is now undervalued and investors aren’t giving SK Hynix proper credit for establishing a lead over Samsung in one of the fastest-growing AI markets.
• SK Hynix Trades in Korea: South Korean companies have long been insular. The market has been more challenging for foreigners to trade in and few companies issue ADRs. That situation is now changing as popular Korean companies like Coupang (NYSE: CPNG) are listing stateside. SK Hynix trades in South Korea with depository receipts on the Luxembourg Stock Exchange. Companies with foreign listings often trade at discounts. For example, shares of Taiwan Semiconductor listed in Taiwan have traded for much of this year at a 20% discount to their shares listed in America!
• DRAM Continues Weighing the Stock: While HBM is growing at torrid rates, traditional DRAM markets have been sluggish, which led to a sell-off across the memory space last summer. Even in a very depressed DRAM market, we believe SK Hynix can deliver solid results and HBM will increasingly drive its business results more with each passing year.

We will likely add shares of SK Hynix to our $500,000 AI Portfolio in the coming months. The valuation is simply too cheap and its leadership in HBM too attractive to pass up on even if it requires jumping through a few more hoops to buy the company from a broker with more international stock offerings like Interactive Brokers.

MaxLinear

We end with our most speculative stock idea. MaxLinear (Nasdaq: MXL) has been an absolute horror show. The company’s revenues have fallen from $1.1 billion in 2022 to $393 million in the past 12 months. MaxLinear attempted a major acquisition it’s now unwinding from (at significant expense), and the stock is down 73% from where it traded at the end of 2021.

Right now you might be asking: Other than that, how was the play, Mrs. Lincoln? 

MaxLinear is a fairly diversified company with business lines that include broadband, connectivity, infrastructure, and industrials. A lot of these markets are at cyclical bottoms right now, which in and of itself is a reason for some optimism.

However, the reason MaxLinear is worthy of interest is that the company has designed its ‘Keystone’ PAM4 DSP it believes can take a significant share in a market that is seeing rapid growth from the rise of AI.

Whether or not MaxLinear will be successful is hard to gauge, but if they are the company’s ‘narrative’ could shift from being a laggard to a company with strong AI tailwinds. Last year, on July 4th I published an article on Applied Optoelectronics (Nasdaq: AAOI) being a tiny semiconductor stock with massive upside.

After that article was published, by the start of December Applied Optoelectronics was up more than 400%. This is all just to say, stocks that go from a cyclical trough to being seen as leading AI leaders can see strong price appreciation in a limited time.

We haven’t purchased Maxlinear in our $500,000 AI portfolio. However, it’s the kind of stock we’ll continue researching and could be a buy candidate if shares sell-off in an interest-rate-fueled market correction.

Follow the AI Portfolio for Our Top Buy Recommendations

If you’ve made it this far, we hope you appreciated our research into some stocks that could double in 2025. We’re confident that recent breakthroughs in the space make getting the full story on the growth of AI more important than ever.

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