Two of the hottest artificial intelligence (AI) stocks heading into 2025 are Palantir Technologies (NASDAQ: PLTR) and SoundHound AI (NASDAQ: SOUN). Both stocks had a phenomenal 2024, with Palantir's stock up almost 400% and SoundHound AI's gaining nearly 900%.

A rate-cutting campaign by the Federal Reserve, a resilient economy and strong corporate earnings provided another solid backdrop for the stock market in 2024. After a stellar 2023, it was a great year for growth stocks in the software space like Palantir Technologies and AppLovin after the S&P 500 and Nasdaq composite confirmed new uptrends in early November 2023 with one-day gains of more than 1.

Seemingly overnight, artificial intelligence became a major growth industry. The AI boom is driving demand for semiconductors, which are crucial components in AI systems. Two compelling semiconductor companies to consider are Wolfspeed (NYSE: WOLF) and Advanced Micro Devices (NASDAQ: AMD).

Cathie Wood didn't jump on the artificial intelligence (AI) bandwagon. Her Ark Innovation ETF has been invested in AI for more than a decade. The exchange-traded fund (ETF) lists AI at the top of the list of disruptive innovations that should deliver strong long-term growth.

Palantir (NASDAQ: PLTR) has quickly emerged as a top artificial intelligence (AI) stock pick for many investors. Palantir makes AI software for its clients that provides the most up-to-date information possible to those with decision-making capabilities.

The field of artificial intelligence (AI) isn't just some fad Wall Street is currently obsessed with but will fade into utter insignificance soon. While some of the hype will die down eventually, the technology has the potential to make corporations more efficient and increase profits over the long run.