Top 3 AI Stocks to Invest in for Long-Term Growth

Artificial Intelligence is no longer a speculative technology of the future, it’s the defining driver of modern business. From predictive analytics to autonomous systems, the AI revolution is fundamentally transforming industries. But the real question is: which companies stand to benefit the most over the long term?

In our view, investors looking for exposure to the AI wave in Australia or globally via the ASX need to sift through the hype and focus on fundamentally strong companies that are implementing AI in scalable, revenue-generating ways. Based on current momentum and forward-looking fundamentals, these three stocks make a compelling case.

 

Why Invest in AI Stocks?

AI is no longer a futuristic concept, it’s already shaping key industries such as healthcare, cybersecurity, finance, and logistics. Companies building AI directly into their workflows or selling the technology that enables such development are likely to see large long-term increases in revenue.

Key Reasons to Invest in AI:

• Exponential Market Growth: According to Goldman Sachs, the global investment in AI is expected to reach over US$200 billion a year by 2025.
• Technological Advancements: Technological advancements such as innovative AI chips, cloud computing, and data analytics are bolstering new business models.
• Cross-Industry Applications: The potential of AI is vast and cuts across numerous industries, resulting in continuous demand for AI-driven solutions.

Investing in AI stocks today means positioning yourself early in an industry that is set to define the future.

 

Nuix (ASX: NXL)

Nuix, is a data technology company. It developed an algorithm that enables unstructured data to be made searchable and provides the structure for more elaborate analysis. The algorithm was first developed as a use case for an Australian government agency, but has expanded into a broader forensics service called Nuix Engine, used by more than 1,000 customers in 78 countries.

 

Why Nuix is Among Our Top Picks

Nuix has put a few controversial years behind it, with an overhaul of its management and a return to growth. The company hopes to gain from the AI boom. Its new Nuix Neo platform contextualises the customers’ data, and language models tuned to a customer’s use case to isolate what is needed.

And it has partnered with AI solutions provider Veritone to integrate Nuix neo with Veritone’s aiWARE ecosystem, which has over 300 AI models and helps users define and automatically redact sensitive information from particular evidence.

The aim is to provide one solution that can handle customers’ audio, textual and video data. In particular, it can help customers meet public record requests and judiciary deadlines for redacted evidentiary media files, ensuring the removal of personally identifiable information.

For FY25 Nuix has promised:

• ~15% ACV growth in constant currency,
• Revenue growth to exceed cost growth, and
• Underlying Cash Flow positive for the full year.

 

 

Artrya (ASX: AYA)

Who thought AI and medtech couldn’t mix? Artyra is medtech company focused on heart disease. Its Salix device uses AI to analyse cardiac (i.e. heart) scans to assist clinicians to determine the extent of ‘vulnerable plaque’ for patients who may be at a risk of heart attacks. The company claims it is the first point of care approach to assess coronary artery disease in 50 years.

 

Why Artrya Stands Out

Salix is not just an idea. It is an actual device that just received FDA approval this past week, and is now free to be rolled out in the USA. Since its listing just over 3 years ago, Artrya worked hard to look for potential customers to adopt the technology once it was approved. It has told investors it’ll be working with 3 particular US hospital groups to roll out the technology in the US Southeast.

 

NextDC (ASX: NXT)

NextDC is the top data centre operator on the ASX, and the second largest in Australia after Equinix. This company provides critical infrastructure for AI, cloud, and enterprise digital transformation.

 

Why NextDC is a Strong AI Play

It is easy to disregard this company because one of the benefits of AI is that some processes will be able to be done ‘at the edge’ rather than through a data centre. But…there is still a place for data centre providers like NXT.

NextDC has been on an aggressive expansion spree with more than a dozen centres in Australia, and has begun to expand abroad (into New Zealand and Malaysia). Notable developments of late include:

• S3 Sydney: A hyperscale data centre built for high-performance computing and AI applications.
• M3 Melbourne: A cutting-edge data centre that supports large-scale machine learning and AI processing in the cloud.

NextDC’s focus on high-performance infrastructure places it in a prime position to benefit from AI-driven digital transformation.

 

Future Outlook

NextDC has undertaken significant capital-raising initiatives to fund its expansion plans, driven by increasing demand from hyperscale cloud clients and enterprise customers investing in AI.

Analysts have shown confidence in NextDC’s growth strategy, with many maintaining a ‘buy’ rating, citing its strategic positioning within the AI infrastructure market. As more organisations deploy AI at scale, secure and scalable data centre solutions will be in greater demand, making NextDC one of the best-positioned ASX stocks in this space.

 

What About Global AI Exposure for Aussie Investors?

Though there are some worthwhile AI-centric stocks on the Australian market, it also must be recognised that some of the biggest winners in the AI revolution are United States based. Microsoft and NVIDIA as Leaders in AI Innovation: NVIDIA announced several new initiatives to push its AI technology.

The good news is that Australian investors do not need to invest in those stocks on international exchanges. They can also take part in the boom in US-based AI stocks through international brokerage platforms or exchange-traded funds (ETFs) which invest in these and other companies. Some of the most reputable ASX ETFs focused on this space are:

• Global X ROBO Global Robotics and Automation ETF (ASX: ROBO) – This ETF provides diversified exposure to global companies involved in robotics, automation, and artificial intelligence, covering sectors such as healthcare, manufacturing, and logistics.
• BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) – This ETF provides exposure to companies involved in the robotics and AI sectors, offering a broad portfolio of international stocks engaged in machine learning, autonomous systems, and AI-driven applications.

Australian investors can cash in on the global AI megatrend without the hassle of investing in single companies, with these ETFs offering diversified risk.

 

Risks to Consider

Investing in AI stocks is not without risks. While the potential for long-term growth is compelling, investors should be aware of the following challenges:

• Overvaluation – Many AI stocks, particularly global technology giants like NVIDIA, trade at exceptionally high valuations. While these companies lead innovation, inflated prices may expose investors to significant volatility.
• Execution Risk – Early-stage AI companies, such as BrainChip, still face hurdles in commercialising their technology. The transition from development to widespread adoption is uncertain and may take longer than expected.
• Macroeconomic Pressures – Rising interest rates, inflation, and geopolitical tensions can influence investor sentiment and impact the valuation of tech stocks. Economic downturns may lead to reduced investment in AI research and development.
• Regulatory Scrutiny – Governments worldwide are increasingly focusing on AI ethics, data privacy, and algorithmic accountability. Stricter regulations could impose new compliance costs on AI companies, potentially affecting profitability.

To navigate these risks, investors should take a long-term perspective and ensure they are well-diversified across various AI segments and industries.

 

Final Thoughts

AI is not just a passing trend, it is a technological revolution that is reshaping industries worldwide. While the market may experience short-term fluctuations, the long-term potential of AI-driven automation, data intelligence, and decentralised computing is undeniable.

For Australian investors looking to gain exposure to AI on the ASX, Nuix, Artrya, and NextDC provide diverse opportunities across different segments of the AI ecosystem. Appen specialises in data annotation and model training, BrainChip focuses on edge AI processing, and NextDC provides the critical infrastructure needed for AI-powered applications.

However, as with any investment, due diligence is essential. Investors should research thoroughly, diversify their portfolios, and maintain a long-term perspective to capitalise on AI’s transformative potential in the years to come.

 

What are the Best ASX Stocks to invest in right now?

Check our buy/sell stock tips.

 

FAQs

• Is AI a good long-term investment?

  Yes, we believe AI is one of the most transformative technologies of our time. According to PwC, AI could contribute over US$15 trillion to the global economy by 2030. Companies integrating AI into real business applications are likely to see long-term growth.

• What sectors benefit most from AI?

  AI is penetrating almost every sector, from healthcare and finance to logistics, energy, and retail. However, companies involved in AI infrastructure (data centres, semiconductors) and data services are particularly well-positioned.

• Are ASX-listed AI stocks worth considering over US tech giants?

  It depends on your risk appetite. ASX-listed AI plays like Appen or BrainChip offer early-stage exposure with growth potential but come with higher volatility. US giants like NVIDIA or Microsoft offer more stability but trade at much higher valuations.

• How can I invest in AI through ETFs in Australia?

  You can buy ETFs like ASX: RBTZ or ASX: ROBO, which track global AI and robotics companies. These offer diversified exposure and are available through most Australian brokers.

• What’s the biggest risk when investing in AI stocks?

  The biggest risks are overhyped valuations and execution challenges, especially for companies still scaling their tech. Additionally, regulatory changes around AI ethics and data privacy could impact future profitability.