4 AI stocks to watch in Q4 – seeking calm in a sea of chaos

Discover:

• Why analysts are calling a Taiwanese foundry the world’s most important company
• The ‘boring’ AI firm that’s insulated itself from the hype bubble
• The concentration risk making analysts bearish on a Magnificent 7 stock
• Why one chip maker just announced a $100 billion investment in OpenAI

The Magnificent 7 - a bellwether for AI growth

What it does
The Magnificent 7 refers to the elite tier of the tech sector. Made up of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and—depending on how you’re measuring—one of Tesla or semiconductor manufacturer Broadcom, the Magnificent 7 accounts for roughly one third of the value of the entire S&P 500.

Why it matters
The immediate fortunes of the tech sector now depend to a very large extent on AI. With the exception of Apple, it’s fair to say the tech elite are fully bought in on artificial intelligence as the primary driver of growth for the next decade or so.

Alphabet, Meta and Microsoft have each announced plans to launch large language model products. Amazon has incorporated AI tools into its cloud services offering. Chip designer Nvidia and semiconductor manufacturer Broadcom are both well-positioned to benefit as integral parts of the supply chain required to deliver.

What to watch
Aside from Broadcom and Nvidia, the remainder of the Magnificent 7 are tech stocks, not pure AI companies. And while their growth is heavily tied to AI, their performance in the market over the next quarter will provide some interesting signals about the future of AI.

Will AI growth cloud the dominance of mega and large-cap tech firms?

Or will the likes of Alphabet and Microsoft be the primary beneficiaries of the AI boom?

TSMC - the most important company in the world right now?

What it does
Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s leading supplier of high-end chips and the world’s biggest chip foundry. This company forms a crucial part of the global supply chain, with leaders in telecommunications and AI especially reliant on its products.

Why it matters
It’s hard to understate the importance of this company to the global economy. Without TSMC, generative AI development grinds to a halt. While that may sound overheated, keep in mind that this is the company that produces the chips that Nvidia designs.

Aside from its role in supporting the evolution and deployment of AI, it is also a key part of the automotive and general computing supply chain too.

Analysts are broadly bullish on TSMC. In September 2025, ahead of its October earnings call, Chinese brokerage Huatai Financial raised its target price^[1] of Taiwan Semi by 6.6%.

Huatai cited strong profitability and an increase to its average selling price as drivers for the adjustment. The company’s solid 58.58% gross profit margin and 39.48% revenue growth^[1] over the last twelve months has made analysts extremely optimistic about the future for TSMC as its relationship with Nvidia continues to flourish.

As of September 2025, the stock’s year-to-date high is NT$1,290.00 (New Taiwan Dollar) and the low is NT$780.00^[2].

What to watch
Compared to headline-grabbing giants like Nvidia, Taiwan Semiconductor Company will be seen by investors as a value buy. Analysts agree. The Motley Fool’s Patrick Sanders struggled to contain his excitement back in June, saying^[3]: “Taiwan Semiconductor stock can be had for a trailing price-to-earnings ratio of around 28, and a forward P/E of just 23. Both of those are much better than Nvidia today.”

Semiconductors, as a rule, are highly exposed to volatility in global demand. This stems from the cyclical nature of the sectors it serves. Rapid technological innovation and short product life cycles can drive high demand, but economic downturns can stifle it.

One particular source of volatility worth paying close attention to is geopolitics. The tense relationship between China and Taiwan is an ongoing cause for caution. In fact, many commentators believe Taiwan’s dominance in the semiconductor space is one of the most important factors in keeping tensions in check. There’s a reason Taiwan is determined to keep a large share of production inside the country.

Nvidia

What it does
Nvidia is a global leader in graphics processing units (GPUs) and AI computing technology. Founded in 1993, it has expanded into data centres, artificial intelligence and autonomous vehicles after starting out as a supplier to the gaming industry.

Nvidia AI hardware powers complex computations across sectors, making it an essential cog in the machine of advanced AI applications and high-performance computing.

Why it matters
Nvidia is rightly seen as a pioneer of the AI revolution, crucial to powering data centres, cloud computing, AI training, autonomous machines and graphics. It dominates GPU tech, which analysts broadly see as its ‘moat’. Nvidia has been riding the wave of rapid AI adoption across industries, becoming the poster child for the next generation of computing.

What to watch
With a market cap of $4.8 trillion and stock sitting at a 12-month high of $176.24^[4] Nvidia is not what you’d call a bargain. But analysts remain convinced Nvidia’s steep growth curve is far from flattening. It could still be a growth pick.

Interested in learning more about market cap and how it affects valuations? Check out the in-depth guide to market cap in our Knowledge Centre.

In September 2025, Nvidia announced a planned $5 billion investment in Intel, sending Intel’s own stock price surging 22%^[5], giving the troubled legacy chipmaker its best day in nearly 38 years.

Nvidia’s proposed investment, which remains subject to approval as of September 19th 2025, forms part of a partnership to expand production and data centre capacity.

Later in the same month, Nvidia announced it would be investing up to $100 billion in OpenAI to support an enormous build-out of data centres.

Nvidia is dominant in a rapidly growing market, with strong financial revenue and earnings growth. It continues to innovate in AI, robotics and gaming.

Bearish investors will naturally point to the price. Nvidia is trading at a premium valuation, which is fair considering recent performance, even if there is still room to grow. But at these prices, investors will be wary of volatility. Keep a keen eye on Nvidia’s upcoming earnings report in November 2025.

Client concentration might also foster caution among investors. A significant portion of Nvidia’s revenue is derived from a small number of tech giants and hyperscalers, exposing it to a degree of potential vulnerability.

UiPath - a midcap gatekeeper proving itself invaluable

What it does
Romania’s first ‘unicorn’, UiPath is an AI-powered business automation platform. Think of it as a productivity force multiplier for large, complex businesses that process and manage lots of data. Clients include major tech and consulting firms. File under ‘boring, but important’ by all means, but don’t ignore it.

UiPath is a leader in two rapidly growing business process areas: agentic automation and robotic process automation. Both of these capabilities are in exceptionally high demand as corporations explore ways to eliminate repetitive processes and free their people from low-value tasks so they can concentrate on higher-value work.

Why it matters
Every business is looking for ways to improve efficiency and productivity. UiPath is at the forefront of the AI solution. As a key partner to major consulting firms, UiPath is well-positioned to grow revenue by upselling novel solutions to its large and growing client base.

What to watch
With a market cap of $6.45bn^[6] and a relatively stable stock price, this could be a solid pick for investors seeking modest growth without worrying about the volatility that comes at the top end of the AI market. UiPath’s most recent earnings report, published in the first week of September 2025, was broadly positive.

Revenue increased 14% year-over-year. Perhaps more interestingly for growth seekers was the news that annual recurring revenue (ARR) had increased 11%, with NET ARR hitting $31 million^[7].

For an AI company, UiPath is relatively insulated from the AI hype bubble. It relies on corporate demand for business process improvement, and it just happens to use AI to help them get there.

Whether UiPath is a good pick depends on how you feel about the corporate world’s appetite for cutting labour costs, rather than whether you’re bullish or bearish on AI specifically.

The bottom line

Whatever your strategy and sentiment, AI will be a defining part of the narrative going into the last quarter of 2025. Nobody can afford to take their eye off how corporate giants implement AI, or the fortunes of the AI supply itself.

Will AI establish itself as a sector that can compete with ‘big tech’? Or will it continue to be an invaluable part of the tech ecosystem that drives value in other sectors, like health and finance?

It’s definitely not going to be boring.