Buy These 5 AI Stocks Now: A Dip Buying Opportunity is Emerging
The artificial intelligence-driven surge of 2023 and 2024 has faced considerable headwinds in 2025, presenting challenges for market participants. Several factors are contributing to this downturn, including overstretched valuations in U.S. stocks, persistent stock inflation, weak economic data, ongoing geopolitical conflicts, and significant concerns surrounding the Trump administration’s tariff and trade policies. The technology sector, particularly AI-focused companies, has been most dramatically affected by these pressures. However, this environment also creates opportunities for investors seeking undervalued stocks. Zacks Investment Research recommends five internet-based AI stocks with favorable Zacks Ranks to consider on the dip. These companies are Arista Networks Inc. (ANET), Fastly Inc. (FSLY), Five9 Inc. (FIVN), HubSpot Inc. (HUBS), and Twilio Inc. (TWLO), all currently holding a Zacks Rank #2 (Buy). These picks represent a strategic approach to navigating the current market conditions.
Arista Networks Inc. (ANET) is a key player in the network infrastructure space, specifically designed to support the growing demands of client-to-campus data center cloud and AI networking. The company operates under three core principles: the best-in-class, highly proactive products with resilience; zero-touch automation and telemetry; and predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. Arista’s EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, provide deep-dive analytics, and facilitate proactive performance issue resolution. Furthermore, its AI suite focuses on crucial network security and optimization. The company’s AI-powered cloud networking solutions offer predictable performance and programmability, allowing for seamless integration with third-party applications for comprehensive network management, automation, and orchestration. Arista AVA augments pervasive visibility, enables continuous threat detection, and enforces robust security protocols. With a projected revenue and earnings growth rate of 18.7% and 12.8%, respectively, for the current year, and with the Zacks Consensus Estimate for current-year earnings having increased by 4% over the last 30 days, Arista Networks presents a strong long-term growth potential. The company is currently trading at a discount of 31.6% from its 52-week high price.
Fastly Inc. (FSLY) provides cloud-based infrastructure software essential for modern applications. The company’s offerings include image optimization, security, edge computing technology, and streaming solutions. Notably, on December 16, 2024, Fastly unveiled Fastly AI Accelerator, a semantic caching solution designed to optimize Large Language Model (LLM) generative AI applications for developers. Fastly’s Edge Cloud Platform offers a streamlined experience enabling developers to utilize a single line of code instead of repeated calls to AI providers for application updates. Fastly has an expected revenue and earnings growth rate of 8.7% and 16.7%, respectively, for 2025, with the Zacks Consensus Estimate for 2025 earnings having increased by 9.1% over the last 30 days. The company is currently trading at a discount of 40.5% from its 52-week high price.
Five9 Inc. (FIVN) specializes in intelligent cloud software for contact centers globally, operating in the United States, India, and internationally. The company’s Five9 Virtual Contact Center Cloud Platform provides a comprehensive suite of applications, enabling a wide range of customer service, sales, and marketing functions. The platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries, allowing for streamlined management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels. Five9 has been benefiting from the increasing adoption of AI tools in its contact center services, particularly with personalized AI agents driving significant growth. The company recently launched its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space, further enhancing its capabilities. Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7%, respectively, for the current year, with the Zacks Consensus Estimate for current-year earnings having increased by 6.6% over the last 30 days. The company is currently trading at a discount of 47.6% from its 52-week high price.
HubSpot Inc. (HUBS) is a leading provider of cloud-based customer relationship management (CRM) platforms, serving businesses across the Americas, Europe, and the Asia Pacific. HubSpot is witnessing steady multi-hub adoption from enterprise customers within the premium market. The company’s pricing optimization in its starter edition is driving solid client additions in the lower end of the market. A key driver of value is the integration of HubSpot AI, which includes state-of-the-art features such as AI assistance, AI agents, AI insights, and ChatSpot. HubSpot’s seat pricing model lowers the barrier to entry for customers and mitigates pricing friction for upgrades. The growing adoption of inbound applications serves as a favorable tailwind. HubSpot has an expected revenue and earnings growth rate of 15.4% and 14.9%, respectively, for the current year, with the Zacks Consensus Estimate for current-year earnings having increased by 2.1% in the last 30 days. The company is currently trading at a discount of 30.2% from its 52-week high price.
Twilio Inc. (TWLO) is a leading provider of a cloud communications Platform-as-a-Service (PAAS), operating across the United States and internationally. Twilio is strategically focusing on generative AI offerings to capitalize on the expanding opportunities in this rapidly evolving space. In June 2023, Twilio launched Customer AI technology, which powerfully combines customer engagement platform data, generative and predictive AI, and Large Language Models (LLMs) to unlock stronger customer relationships for brands. Twilio is integrating generative AI capabilities across its entire platform and every customer touchpoint. By training LLMs for customers with their data within its Segment customer data platform, Twilio aims to help customers enter the AI race multiple steps ahead of their peers. The company has partnered with Alphabet Inc. (GOOGL) for Google Cloud to integrate generative AI into the Twilio Flex customer engagement platform, further enhancing its capabilities. Twilio’s initiative to integrate generative and predictive AI technology across its platform is likely to boost its revenue growth over the long run. 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 7.8% and 22.6%, respectively, for the current year, with the Zacks Consensus Estimate for current-year earnings having increased by 7.1% in the last 30 days. The company is currently trading at a discount of 25.3% from its 52-week high price.
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