3 AI Stocks That Gen Z Investors Can’t Afford to Miss in Their Portfolio Strategy

Artificial intelligence stocks surge as the next frontier for young investors seeking exponential growth.

Generation Z's Portfolio Revolution

Move over traditional tech - AI companies are rewriting the rules of market dominance. These three stocks represent the bleeding edge of machine learning, automation, and cognitive computing that align perfectly with Gen Z's digital-native mindset.

The AI Investment Thesis

While Wall Street veterans chase yesterday's winners, these AI pioneers are building tomorrow's infrastructure. Their technology stacks power everything from predictive analytics to autonomous systems, creating moats that traditional companies can't easily cross.

Market Positioning & Growth Trajectory

Each selection demonstrates robust revenue growth, patent protection, and scalable business models. They're not just riding the AI wave - they're creating the algorithms that define it.

Because let's be honest - if your portfolio doesn't include companies building the future, you're essentially betting on horse carriages in the age of autonomous vehicles.

Image source: Getty Images.

So if you're a Gen Zer who's looking for some promising growth stocks that have a real shot at consistently outperforming the market, you might want to check out a few oft-overlooked plays in the booming artificial intelligence (AI) market. Here are three AI stocks that might generate some big gains for younger investors who still have decades to go before they retire:(NVTS 11.82%),(SOUN -1.63%), and(DDOG 4.49%).

1. Navitas Semiconductor

Navitas produces gallium nitride (GaN) and silicon carbide (SiC) chips, which can operate at higher temperatures and voltages than traditional silicon chips. These chips are often used in laptop chargers, EV chargers, solar inverters, industrial motor drives, and data center power supplies.

In the past, Navitas derived most of its growth from the electric vehicle, solar, and industrial markets. But this May,(NVDA 2.05%) chose Navitas' GaN and SiC chips to process its AI workloads at its own next-gen data centers. Navitas doesn't expect to generate any revenue from that massive deal until 2027, but it could convince more enterprise customers to install its resilient chips in their AI-oriented data centers.

Analysts expect Navitas' revenue to drop 42% in 2025 as its Core EV, solar, and industrial markets remain weak and it laps the end of a partnership with a key distributor. But from 2025 to 2027, analysts expect its revenue to grow at a CAGR of 40% as it narrows its net losses. It isn't cheap at 26 times next year's sales, but its growth could accelerate significantly over the next decade as more companies integrate GaN and SiC chips into their devices.

2. SoundHound AI

SoundHound AI develops AI-powered audio and voice recognition tools. Its namesake app can identify songs with just a few seconds of audio, but most of its growth comes from Houndify -- a developer-oriented platform that helps companies create their own voice recognition services that don't share their customers' data with big tech companies.

SoundHound serves a wide range of customers across the auto, restaurant, customer service, retail, hospitality, healthcare, financial, and smart device industries. It expanded its ecosystem by acquiring the AI restaurant services provider SYNQ3, the online food ordering platform Allset, and the conversational AI company Amelia over the past two years.

From 2024 to 2027, analysts expect SoundHound's revenue to grow at a CAGR of 47% as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turn positive by the final year. It might seem expensive at 31 times next year's sales, but it's poised to profit from the surging demand for AI-powered voice services. If you expect to talk to more AI agents and chatbots than real humans in the future, then SoundHound might be a great long-term investment.

3. Datadog

Datadog's platform helps IT professionals spot problems across large organizations by pulling real-time data from a wide range of fragmented computing platforms. Instead of tracking down those issues individually, it unifies all of that data on its diagnostic dashboards. Its generative AI assistant, Bits AI, further simplifies that process.

Datadog serves more than 30,000 customers worldwide, including companies like,,,, and. That makes it a top play on the secular expansion of the global data observability market, which Grand View Research expects to grow at a CAGR of 10.7% from 2024 to 2030.

From 2024 to 2027, analysts expect Datadog's revenue and adjusted EBITDA to grow at a CAGR of 22% and 19%, respectively. It still looks reasonably valued at 11 times next year's sales and 45 times its adjusted EBITDA. If you expect more companies to realize that they're running too many types of software across too many computing platforms, then Datadog could be a great way to profit from the destruction of those silos and the unification of those computing platforms under a single diagnostic umbrella.