To choose the right AI stock for your portfolio, identify a business model you understand and … [+]
AI stocks are still having a moment, even with some volatility in play. Here’s a look at the five best-performing AI stocks over the last 12 months. Will one of these fit well in your portfolio? Read on to find out.
AI Stocks And The Current Market
The stock market has been volatile in 2025. Uncertainty about tariffs and federal budget cuts are driving broad instability in stock prices.
AI stocks have been especially reactive. Many AI stocks have high valuations, as investors set prices based on growth prospects rather than past performance. When data suggests the growth outlook has changed, investors react. Stock prices will rise or fall quickly as a result.
You can see the reactivity by tracking an AI ETF like Invesco’s AI and Next Gen Software ETF (IGPT). In 2024, IGPT grew as much as 28% before dipping and ending the year with an 11% gain. So far in 2025, the ETF is down 6%. By comparison, the S&P 500 is down 2.3% for the year.
Criteria Used To Determine The Best-Performing AI Stocks
These best AI stocks were chosen by screening on stock price growth over the past year. The stocks with the largest one-year growth percentages and market capitalizations above $2 billion were selected.
5 Best-Performing AI Stocks In The Last Year
The table below includes five best-performing AI stocks, with their market capitalizations and one-year growth trends. For more investing ideas, see best stocks for 2025.
1. Palantir Technologies Inc. (PLTR)
- Stock price: $84.91
- Revenue growth: 28.79%
- EPS growth: 111.11%
- Operating cash flow (millions): $1,153.87
- Debt-to-equity: 0.05
Palantir Technologies Business Overview
Palantir makes AI-enabled software for counterterrorism, manufacturing efficiency, software management and data analytics. The company serves commercial and government customers. The government business drives more revenue, but the commercial revenue grew faster in 2024.
Why PLTR Stock Is A Top Performer
Palantir is at the forefront of the AI revolution. The company’s software promises to unlock valuable data insights for efficiency and better decision-making, potentially reshaping how businesses and agencies operate.
The stock price has increased more than 200% to the low-$80s in the last 12 months. This includes a February pullback from $125 when investors got nervous about Palantir’s high valuation in light of planned government spending cuts.
The current price point may signal a buying opportunity for AI investors. The company is profitable and growing. Revenue grew 38% in 2024 to $1.9 billion, with double-digit gains in commercial and government sales. The company expects 31% revenue growth this year as well.
Palantir is also flush with cash, holding some $5.2 billion in cash and short-term investments on the balance sheet.
2. Upstart Holdings, Inc. (UPST)
- Stock price: $53.69
- Revenue growth: 23.43%
- EPS growth: NA
- Operating cash flow (millions): $186.33
- Debt-to-equity: 2.43
Upstart Holdings Business Overview
Upstart operates an AI lending platform that uses machine learning models to evaluate credit risk. The company says its solution is more accurate than legacy, credit-score models.
Why UPST Stock Is A Top Performer
Upstart helps its financial clients approve more loans with lower APRs. According to company data, lenders can approve 101% more applications and deliver 38% lower APRs using Upstart versus a traditional credit evaluation.
UPST stock’s trajectory has been like PLTR’s. The USPT stock price is more than 100% in the last 12 months, after a decline that began in February. The downturn followed three analyst price target increases and a positive EPS surprise—indicating investors are concerned about the economy, rather than Upstart specifically.
Upstart grew 2024 revenues 24% and halved its net loss. Income from operations was negative last year, but adjusted EBITDA was a positive $10.6 million. The company has $368 million in cash and a high debt-to-equity ratio of 2.45.
3. Twilio Inc. (TWLO)
- Stock price: $106.08
- Revenue growth: 7.32%
- EPS growth: NA
- Operating cash flow (millions): $716.24
- Debt-to-equity: 0.14
Twilio Business Overview
Twilio offers technology solutions supporting personalized customer communications. Using Twilio’s platform, marketers can use data and customer actions to authenticate users and trigger tailored text messages and emails.
Why TWLO Stock Is A Top Performer
Twilio has been in the personalized communications space for years. In 2024, the company enhanced its AI functionality with support for developing customer-facing AI assistants. Twilio’s AI Assistants can connect to nearly any data source and integrate with Twilio voice and text campaigns.
Twilio’s move into AI has driven big stock price gains. TWLO is up nearly 74% over the last 12 months. The company also got caught in the technology sell-off last month—in early February, the stock price was nearly $40 higher than now. Twilio did miss the consensus EPS target for the fourth quarter by $0.03, but the miss was followed by at least three analyst price target increases.
Twilio increased 2024 reported revenues by 7% and shrank its GAAP operating loss to $53.7 million from $876.5 million in the prior year. The company has about $2.3 billion in cash and short-term marketable securities on its balance sheet and maintains a low debt-to-equity ratio of 0.14%.
4. SoundHound AI, Inc. (SOUN)
- Stock price: $9.74
- Revenue growth: 76.05%
- EPS growth: NA
- Operating cash flow (millions): -$89.63
- Debt-to-equity: 0.15
SoundHound AI Business Overview
SoundHound provides AI-enabled voice solutions that power automated customer-facing agents. Products include voice assistant, AI chat solutions and generative voice AI for drive-thru ordering.
Why SOUN Stock Is A Top Performer
SoundHound works in agentic AI, a segment predicted to be worth $196.6 billion by 2034. The company says its patented technology comprehends speech faster and provides more accurate responses than other solutions. The technology can potentially reshape industries that rely on direct conversations with customers, including fast food and hospitality.
SoundHound stock has grown about 73% over the last 12 months. The stock price peaked in December just short of $25, before moderating back to about $15 in February and $9.74 in March.
The company’s 2024 results, announced in late-February, contributed to the weaker stock price in March. Revenues grew 85% but the GAAP loss per share widened to $0.69 from $0.07. At year-end, SoundHound had no debt and nearly $200 million in cash on hand.
5. SAP SE (SAP)
- Stock price: $276.80
- Revenue growth: 9.51%
- EPS growth: -49.04%
- Operating cash flow (millions): $5,646.61
- Debt-to-equity: 0.39
SAP SE Business Overview
SAP makes enterprise resource planning (ERP) software. Businesses use ERP to manage critical processes in marketing, finance, procurement and more. SAP has the second-highest market share in ERP, behind Microsoft.
Why SAP Stock Is A Top Performer
SAP incorporates AI functionality into its applications and its Business Technology Platform (BTP). BTP is a comprehensive cloud-based solution supporting data storage and management, AI, analytics, application development and automation. SAP customers can leverage AI capabilities using their business data rather than dated training data.
Key Trends Driving The Outlook of AI Stocks
Nvidia and other hardware providers led the first wave of AI investing as enterprises spent billions building and expanding data centers. As reported by Investors.com, a Goldman Sachs analysis predicts software companies will be next to monetize the AI revolution.
Business decision-makers will invest in AI if it can save money and improve marketing effectiveness. Software providers that deliver these outcomes are the ones that will prevail. Examples include:
- Agentic AI, or autonomous AI that can learn, converse and handle tasks independently, can expand customer service teams without adding human operators.
- AI can enhance cybersecurity by proactively identifying threats and vulnerabilities.
- AI can improve health care diagnostics by processing data faster than humans.
- AI-driven algorithms can prompt e-commerce shoppers to spend more by suggesting add-on products and services.
Is Now A Good Time to Invest in AI Stocks?
Several AI stocks saw a pullback in February, which could signal a buying opportunity. Software providers are particularly attractive because they can provide real business value to their customers. Solutions that offer solid returns will grow the quickest.
AI companies with the cash and leadership savvy to manage growth effectively will pay their shareholders handsomely in stock price gains.
Bottom Line
AI stocks are high-risk, high-reward securities. To choose the right one for your portfolio, identify a business model you understand and confirm the company has the cash flow, value proposition and leadership skill to navigate uncertain economic conditions. If the valuation is acceptable, begin with a small position and increase it as you gain confidence investing in this space.