2 Promising AI Stocks for a Potential Recovery in 2025

AI stocks have seen significant declines, but a bounce-back in the second half of 2025 may be possible for arguably two key players: Advanced Micro Devices (AMD) and The Trade Desk (TTD). AMD is innovating in AI technology while The Trade Desk shows resilient revenue growth despite challenges. Both stocks may present enticing opportunities for investors.

As we tread through a tumultuous stock market, AI stocks have faced significant declines with many losing over a third of their value. However, this dip might set the stage for a potential recovery in the latter half of 2025, particularly for Advanced Micro Devices (AMD) and The Trade Desk (TTD).

1. Advanced Micro Devices (AMD)
AMD has experienced a dramatic fall, plummeting over 60% in the past year, primarily due to its struggle in the AI accelerator market, especially against competitors like Nvidia. Tariff concerns and sales restrictions targeting Chinese customers further intensified investor fears. Nevertheless, AMD is poised for recovery with promising advancements in AI technology, including the upcoming release of the MI350 later this year and the MI400 in 2026. CEO Lisa Su’s upcoming presentation on June 12 could reignite investor interest in AMD’s vision.

Positive signs are emerging in AMD’s previously declining sectors. The 33% revenue drop in its embedded segment is showing stabilization, and analysts anticipate a better revenue forecast of 22% growth for 2025. With rising revenue correlating to future profitability, AMD’s forward P/E ratio of 19 positions it as a potentially undervalued stock, encouraging investor interest as it offers an appealing earnings multiple.

2. The Trade Desk (TTD)
The Trade Desk has endured a notable slide this year, despite its pivotal role in the digital advertising realm, enabling advertisers to optimize ad campaigns effectively. The company’s stock, once a market darling, faced significant downturns after missing revenue targets and being swept up in a broader market sell-off. Since its peak in December, the stock has tumbled approximately 65%.

However, the current P/E ratio has significantly decreased from over 225 to 64, marking its lowest point since 2018. The forward P/E ratio at 28 indicates that TTD may offer value at this juncture. Remarkably, revenue grew by 26% in 2024, reaching over $2.4 billion, showcasing the company’s resilient growth, even amid pressures. With forecasted Q1 revenue showing a potential 17% increase, investors may find TTD’s current pricing appealing given the lessened risk of missing future estimates.

In summary, despite the recent turmoil impacting AI stocks, both AMD and The Trade Desk present compelling opportunities for potential investor recovery in the second half of 2025. AMD is innovating within the AI accelerator space while recovering its lost ground, whereas The Trade Desk showcases consistent revenue growth despite a tough market. Each company, with its respective valuation metrics and growth potential, offers strategic entry points for savvy investors ready to navigate the evolving AI landscape.

Original Source: www.fool.com