Investors are focusing on AI stocks despite challenges

U.S. stocks have not performed as well as expected in 2025. The return of former President Donald Trump to protectionist economic policies has created challenges for major tech companies. These companies have driven much of the S&P 500’s growth since late 2022. Despite short-term market ups and downs, there are opportunities to buy stocks that have potential for long-term growth, especially in artificial intelligence (AI). Many AI stocks have shown impressive growth but have faced significant drops this year. Two AI companies that stand out during this downturn are Archer Aviation and Serve Robotics. Both companies show promise for future growth. Archer Aviation focuses on electric vertical takeoff and landing aircraft. Although its stock has dropped nearly 17% this year, it has a strong market opportunity valued at $4.4 billion. Archer is partnering with Palantir Technologies and Anduril Industries to develop advanced aviation systems. The company has already secured its first customer and is well-positioned to compete for defense contracts. With over $1 billion in cash, Archer has the resources needed to pursue its vision of future air travel. Serve Robotics is changing last-mile delivery with AI-powered sidewalk robots. Despite a 46% decline in its stock this year, Serve's revenue growth jumped 773% last year, reaching $1.8 million. The company is expanding to several major U.S. cities and has developed new robot designs that are more efficient and cost-effective. Serve has secured partnerships with major brands, which will help it reach more customers. With $203 million in cash, the company plans to deploy 2,000 robots across the U.S. by the end of this year. Both companies have strong potential but face risks. Archer must tackle regulatory challenges for commercial certification, while Serve needs to prove it can operate effectively in different urban settings. However, their current valuations seem to reflect these risks, creating a unique opportunity for investors. For those willing to navigate market volatility, these AI companies could offer significant rewards as they work towards fulfilling their ambitious goals.