The astonishing rally of U.S. stocks in 2023 and 2024 continued in the first half of 2025, albeit at a slow pace. The rally was predominantly driven by the technology sector with an unprecedented adoption of generative artificial intelligence (AI) technology across the world.

The AI-driven rally suffered multiple setbacks in first-half 2025 due to the unveiling of the low-cost Chinese DeepSeek AI platform, the Trump administration’s decision to stop the export of high-end AI processors to China, global turmoil related to trade after President Trump imposed reciprocal tariffs and geopolitical conflicts in the Middle East.

AI infrastructure space recently gathered steam, with the DeepSeek-related fears turning out to be overblown. Moreover, chances of a U.S.-China trade deal, the Fed’s indication of two rate cuts of 25 basis points each this year and the evaporation of recession worries in the U.S. economy boosted market participants confidence.

Here we recommend five AI stocks to invest in for the second half of this year. These stocks have appreciated in the past three months. Each of our picks sports a Zacks Rank #1 (Strong Buy) reflecting near-term price upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.

These stocks are: Jabil Inc. (JBL Quick QuoteJBL - Free Report) , Twilio Inc. (TWLO Quick QuoteTWLO - Free Report) , UiPath Inc. (PATH Quick QuotePATH - Free Report) , Intuit Inc. (INTU Quick QuoteINTU - Free Report) and Dell Technologies Inc. (DELL Quick QuoteDELL - Free Report) . 

AI Frenzy Remains Rock Solid

The recent AI turmoil is nothing but profit-taking, especially on the part of institutional investors. Stock markets consist of bull and bear operators. As bulls fly high, bears wait quietly for a suitable time and some factors necessary for profit-booking so that they can reenter the market at a reasonably low level. Stock prices of several AI companies have skyrocketed 100-500% in the last two years. Therefore, the speculation of a market correction was ripe from the beginning of 2025. 

Nevertheless, the AI space remains rock solid supported by an extremely bullish demand scenario. Four of the “magnificent 7” stocks have decided to invest a massive $325 billion in 2025 as capital expenditure for AI-infrastructure development. This marks a significant 46% year-over-year increase in capital spending on the AI ecosystem. 

This huge spending on AI infrastructure will dramatically change the world over the next five years in fields like hyperscale automation, robotics, healthcare, energy, materials, financials and cybersecurity. Research firm Oppenheimer estimated that the total addressable global sovereign AI market could be a massive $1.5 trillion.

The chart below shows the price performance of our five picks in the past three months.

Image Source: Zacks Investment Research

Jabil Inc. 

Jabil has been benefiting immensely from healthy momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce business verticals. Its focus on end-market and product diversification is a key catalyst. Jabil’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. 

JBL’s high free cash flow indicates efficient financial management practices, optimum utilization of assets, and improved operational efficiency. Massive application of generative AI is set to drastically increase the efficiency of JBL’s automated optical inspection machines for automation industry. A large-scale portfolio of business sectors offers JBL a high degree of resiliency during times of macroeconomic and geopolitical disruption.

Jabil has an expected revenue and earnings growth rate of 5.9% and 18.5%, respectively, for the next year (ending August 2026). The Zacks Consensus Estimate for next-year earnings has improved 9% over the last 30 days.

Twilio Inc.

Twilio is a leading provider of cloud communications Platform-as-a-Service in the United States and internationally. TWLO is focusing on generative AI offerings to tap the growing opportunities in this space. 

In this regard, TWLO launched Customer AI technology in June 2023, which powerfully combines customer engagement platform data, generative and predictive AI, and large language models (LLMs) to unlock stronger customer relationships for brands. 

TWLO is integrating generative AI capabilities across its platform and every customer touchpoint. The company believes that by training LLMs for customers with their data inside its Segment customer data platform, Twilio will be able to help customers enter the AI race multiple steps ahead of their peers. 

TWLO has also partnered with Alphabet Inc. (GOOGL) for Google Cloud to integrate generative AI into the Twilio Flex customer engagement platform. Twilio’s initiative to integrate generative and predictive AI technology across its platform is likely to boost its revenue growth over the long run. 

Twilio enables companies to create personalized, customer-aware experiences powered by OpenAI. Through this integration, Twilio customers will be able to use OpenAI’s GPT-4 model to power new generative capabilities in Twilio Engage, its multichannel marketing solution built on the Segment Customer Data Platform.

Twilio has an expected revenue and earnings growth rate of 7.9% and 22.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.9% over the last 60 days. 

UiPath Inc.

UiPath provides an end-to-end automation platform that offers a range of robotic process automation solutions primarily in the United States, Romania, the United Kingdom, the Netherlands, and internationally. PATH offers a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization. 

The PATH platform's embedded AI (artificial intelligence), ML (machine language), and NLP (Natural Language Processing) capabilities improve decisioning and information processing. PATH introduced new generative AI features, including specialized LLMs (Large Language Model) such as DocPATH and CommPATH, and Context Grounding, to enhance automated AI models for specific business needs.

UiPath has an expected revenue and earnings growth rate of 8.5% and 5.7%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the last 30 days.

Intuit Inc.

Intuit has been benefiting from steady revenues from the Online Ecosystem and Desktop business segments. INTU’s strong momentum in Online Services revenues is driven by the solid performance of Mailchimp, payroll and Money, which includes payments, capital and bill pay. 

Intuit’s generative AI-powered "Intuit Assist," provides financial assistant, enabling personalized insights and recommendations, integrated into products like TurboTax, Credit Karma, QuickBooks, and Mailchimp, aiming to fuel small business and personal financial success.

INTU’s Credit Karma business is benefiting from strength in Credit Karma Money, credit cards, auto insurance and personal loans. INTU’s strategy of shifting its business to a cloud-based subscription model will help generate stable revenues over the long run. Cloud is a flourishing part of the technology space and has been gaining momentum in recent years.

Intuit has an expected revenue and earnings growth rate of 11.7% and 13.7%, respectively, for the next year (ending July 2026). The Zacks Consensus Estimate for next-year earnings has improved 0.2% over the last 30 days. 

Dell Technologies Inc.

Dell Technologies has been benefiting from strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications. In the last reported quarter, DELL secured $12.1 billion in AI server orders, surpassing shipments and building a strong backlog. 

DELL’s PowerEdge XE9680L AI-optimized server is very much in demand. Strong enterprise demand for AI-optimized servers is aiding the company. A robust partner base that includes the likes of NVIDIA, Google and Microsoft has been a major growth driver. 

DELL is expanding its cloud services through its infrastructure solutions and rich partner base that provides essential hardware and services that support cloud environments. Through its APEX platform, DELL provides multi-cloud solutions and advanced AI infrastructure, which have become key highlights of its offerings.

Dell Technologies has an expected revenue and earnings growth rate of 8.7% and 16%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.