All anyone is talking about these days seems to be artificial intelligence (AI). AI stocks like Nvidia are trading at a market cap of around $4.3 trillion, while private AI companies like OpenAI and Anthropic are raising tens of billions of dollars from private markets.
That’s a lot of money already committed to AI. But does that mean there is no more juice left to squeeze from the AI bull market? Far from it. While stocks like Nvidia may trade at expensive earnings multiples, there are still technology stocks that will benefit from the AI revolution and continue to trade at reasonable prices.
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Here are two top AI stocks to buy in March for your portfolio.
The most underrated winner in AI might be Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). It is a technology conglomerate that owns Google, YouTube, Android, Google Cloud, and Waymo. It has also developed the fast-growing Gemini AI chatbot.
All these businesses should benefit from the global adoption of AI. Google Search uses AI in its results, making it easier for customers to find information about the world and, therefore, increasing the overall number of queries globally. More queries should mean more potential advertising revenue, which grew 17% year over year last quarter to $63 billion. This AI enhancement will apply to other Alphabet properties, such as YouTube or Waymo.
In addition to consumer improvements, AI is making inroads into more effective advertising targeting, which should be another boost to revenue. The Gemini chatbot now has 750 million monthly active users (MAUs) on its mobile app, earning revenue from paying users and businesses for its pro plan.
The Alphabet segment that benefits most from AI is Google Cloud. Cloud revenue grew an astonishing 48% year over year last quarter to $17.7 billion and is seeing increasing operating margins at scale. All sorts of other AI companies are using Google Cloud’s data centers and AI expertise to run their own software applications, driving enormous demand.
Today, Alphabet stock trades at a price-to-earnings (P/E) ratio of 29, which is not overly expensive for a business growing consolidated revenues at 18% year over year. This makes Alphabet a great AI stock to buy for your portfolio in March.
A company once thought to be left behind in the AI revolution is Amazon (NASDAQ: AMZN). On a percentage basis, its cloud computing division is growing more slowly than the competition. It does not have a leading AI chatbot, although it does have its Rufus bot for Amazon e-commerce shopping.
