The artificial intelligence (AI) investing trend may seem a bit old to some, but the amount of money some of the biggest tech companies are pouring into this race makes it a must-invest-in space.

There are many options, but I prefer to pick some stocks already seeing benefits from the AI arms race. Three AI companies that I think are no-brainer buys right now are Nvidia (NVDA 1.69%), Taiwan Semiconductor (TSM 4.06%), and Alphabet (GOOG 2.34%) (GOOGL 2.34%).

Although these three are rather large businesses already, they are all experiencing strong growth and are fairly cheap for the performance they are putting up. As a result, they could increase your portfolio returns to market-crushing levels and accelerate your path to creating a fortune in the stock market.

1. Nvidia

Few businesses have benefited as much from the AI arms race as Nvidia. The company makes graphics processing units (GPUs), which are incredibly useful for calculations that require massive computing power.

GPUs compute multiple processes in parallel, an effect that can be further amplified by connecting thousands of GPUs in a cluster. This has made Nvidia’s GPUs the top choice for any company building out a data center to train AI models, and it doesn’t look like that growth is slowing anytime soon.

While investors have heard language from the tech giants about how AI spending will ramp up in 2025, it wasn’t known how much of that will flow to Nvidia. Investors now have their answer: A lot.

In the fourth quarter of fiscal year 2024 (ended Jan. 26), Nvidia posted 78% revenue growth to $39.3 billion, with data center revenue totaling $35.6 billion, up 93% year over year. Furthermore, Nvidia expects Q1 revenue to come in around $43 billion, indicating 65% growth. Clearly, Nvidia isn’t done growing yet, but the stock market seems to have gotten bored with Nvidia.

NVDA PE Ratio (Forward) data by YCharts

Nvidia’s stock trades for a cheap 27 times forward earnings, which is pretty reasonable considering how strong its growth has been. I think Nvidia has plenty of room for upside in 2025, and investors should take any chance they get to load up on more Nvidia shares while they are down.

2. Taiwan Semiconductor

Taiwan Semiconductor is another massive beneficiary of the AI arms race. The chips that devices like GPUs use have to come from somewhere (as Nvidia doesn’t own a chip foundry), and TSMC is the most popular partner for many of the big tech companies that want to incorporate the latest and greatest chip advancements.

AI has been a huge boom for Taiwan Semi, and it seems set to continue. Because of TSMC’s position within the industry, it has great foresight into the growth that this industry is expected to exhibit, as it receives orders for its chips years in advance. Over the next five years, TSMC’s management expects AI-related revenue to grow at a 45% compounded annual growth rate (CAGR). That’s massive and plays into the companywide CAGR of 20% over the next five years.

It’s rare for a company of TSMC’s size to give 20% growth projections, let alone to do it over a five-year time frame. However, that’s what TSMC’s management is forecasting, and investors need to take note. With the stock trading for less than 20 times forward earnings, the market is giving investors a gift right now, and investors should take advantage of this dirt cheap stock.

3. Alphabet

Although some may see Alphabet as a big spender in the AI arms race, it’s also a huge beneficiary. Alphabet has an important business unit that is booming thanks to AI demand: Google Cloud.

Google Cloud is Alphabet’s cloud computing segment and is seeing a massive demand wave as clients rush to set up AI models. Because these clients don’t continuously need enough computing power to train an AI model, they turn to cloud computing providers to rent what they need. However, Google Cloud (and its competitors) must spend money to make money, as this capacity needs to be built before the demand arrives. Otherwise, potential clients will go elsewhere.

This will provide growth for years to come, but in the meantime, Alphabet’s base business (the Google search engine) is doing well enough for the company to continue promoting market-beating returns. In Q4, Alphabet’s revenue rose 12% year over year, with earnings per share (EPS) rising 31%. Wall Street analysts expect Alphabet’s revenue to rise 11% in both 2025 and 2026, as well as post EPS growth of 12% and 14%, respectively.

Considering that the market tends to grow at around a 10% pace on average, that indicates that Alphabet should beat the market based on growth alone. This should lead investors to the conclusion that Alphabet has a slight premium to the broader market’s valuation, but you’d be wrong.

GOOG PE Ratio (Forward) data by YCharts

The S&P 500 (^GSPC -1.22%) trades for 22.6 times forward earnings, a significant discount to the broader market. With Alphabet’s growth and the long-term catalyst of AI spending in Google Cloud and its advertising wings, this is unwarranted pessimism and could drive Alphabet to vastly outperform the markets over the next five years.