Two AI Stocks Worth Considering for Your Portfolio

Published Date : 20/09/2025 

Discover why Amazon and Upstart Holdings are leading the way in artificial intelligence, offering significant growth potential for investors. 

Investments related to artificial intelligence (AI) tend to attract considerable interest and investor returns. As this technology brings new innovations and transforms existing industries, shareholders of these companies are likely to reap the benefits. Although investors may widely understand some of these available opportunities, the range of lucrative AI investments will likely extend far beyond AI stalwarts such as Nvidia and Palantir. As the technology brings more transformation, investors should prepare for these stocks to rise amid an increased AI focus.

Amazon is a prime example of a company that has successfully integrated AI into its operations. As a pioneer in e-commerce and cloud computing, it has evolved into a conglomerate supported by several consumer-related and tech businesses. However, if investors overlook Amazon as an AI company, they are likely making a huge mistake. Amazon Web Services (AWS), the world's leading cloud infrastructure company, plays a critical role in supporting AI-related functions for its clients.

AWS offers various AI applications, including a generative AI application builder, chatbots, and code builders. These tools are crucial for AWS's clients, who rely on these services to enhance their own AI capabilities. On the e-commerce side, AI supports shopping services and customer service functions, underpinning fast-growing enterprises within the company, such as digital advertising and third-party seller services. Additionally, AI bolsters robotics and supply chain management, improving efficiencies within its logistics network.

Despite generating $323 billion in net sales in the first half of 2025, Amazon's 11% annual growth is slower than in past years. However, the company has kept cost and expense growth in check, leading to a 48% increase in net income compared to year-ago levels. This translates to $35 billion in net income for the period. Overall, the stock is up by about 25% over the last year, which lags the aforementioned rate of profit growth. However, with its profits likely to continue growing at a rapid pace, now appears to be a great time to add shares.

Another promising AI stock is Upstart Holdings, which applies AI to a business long overdue for a technical upgrade: loan evaluation. The Fair Isaac Corporation (FICO) controls the dominant loan evaluation metric, the FICO Score, which has not undergone a significant update since its introduction in 1989. This leaves the industry vulnerable to competitive challenges. Upstart continues to upgrade its technology, updating its AI-driven model and approving 92% of loan applications without human intervention. Thanks to the added factors it considers, Upstart's model can approve 101% more applicants without increasing risks to lenders.

Upstart has derived the majority of its revenue from evaluating personal loans. However, it is gaining traction in the auto loan market and has begun evaluating applicants for home equity lines of credit. These new avenues should dramatically expand the company's addressable market. Amid these initiatives, investors should expect considerable growth for Upstart over the next few years. The Federal Reserve's recent move to trim interest rates should further supercharge growth.

Indeed, growth has returned to Upstart after recent declines in loan volumes. In the first half of 2025, revenue of $471 million increased by 84% compared to the same period last year. During that period, the company limited the rise in expenses to 24%, returning it to profitability. Though the net income for the first two quarters of 2025 is just $3.2 million, it is a vast improvement from the $119 million loss during the same time frame in 2024. Investors have noticed these improvements, and the stock is up by almost 75% over the last year.

Admittedly, the profit levels are too modest to yield an applicable P/E ratio. However, the forward earnings multiple of 40 is arguably cheap when considering its AI-driven potential for transformation, making Upstart stock an attractive choice for investors. 

Frequently Asked Questions (FAQS): 

Q: What is the role of AI in Amazon's business?

A: AI plays a critical role in Amazon's operations, particularly through Amazon Web Services (AWS), which supports AI-related functions for clients. It also enhances e-commerce services, customer service, digital advertising, and third-party seller services.

Q: How does Upstart Holdings use AI in loan evaluation?

A: Upstart Holdings uses AI to upgrade loan evaluation models, approving 92% of loan applications without human intervention. Its AI-driven model considers additional factors, allowing it to approve 101% more applicants without increasing risks to lenders.

Q: What is the growth potential of Amazon's stock?

A: Amazon's stock has the potential for significant growth, with its net income growing by 48% in the first half of 2025. Despite slower sales growth, the company's cost and expense management have led to increased profitability.

Q: Why is Upstart Holdings a promising AI stock?

A: Upstart Holdings is a promising AI stock due to its innovative use of AI in loan evaluation, expanding into new markets like auto loans and home equity lines of credit, and recent financial improvements. The stock has risen by almost 75% over the last year.

Q: What is the forward earnings multiple of Upstart Holdings?

A: The forward earnings multiple of Upstart Holdings is 40, which is considered relatively cheap given the company's AI-driven potential for transformation and growth. 

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