To identify the best AI stocks, we refer to the Morningstar Global Next Generation Artificial Intelligence Index, which highlights top constituents that earned ratings of 4 or 5 stars by Morningstar as of January 14, 2025, indicating they are undervalued. The recommended stocks include: 1. **Microsoft (MSFT)** - Rated 4 stars, with a wide economic moat and medium uncertainty. Microsoft leads in AI with offerings like OpenAI's ChatGPT, and its shares are valued 15% below a fair estimate of $490. 2. **Alphabet (GOOGL)** - Also rated 4 stars, with a wide moat. Alphabet, owning Google, focuses heavily on AI to enhance its search and advertising businesses, trading 14% below a fair value of $220. 3. **Oracle (ORCL)** - Rated 4 stars with a narrow moat. As a prominent database provider, Oracle is capitalizing on its cloud transition and is considered undervalued by 20%, with an estimated worth of $195 per share. 4.

**Advanced Micro Devices (AMD)** - This semiconductor company has a 4-star rating and a narrow moat but faces high uncertainty. Its stock trades 27% below a fair value estimate of $160, benefiting from the AI and data center growth trends. 5. **Adobe (ADBE)** - With a rating of 4 stars and a wide moat, Adobe, known for its creative software, is undervalued by 30%, estimated at $590 per share. 6. **Cognizant Technology Solutions (CTSH)** - This IT services leader has a 4-star rating and narrow moat. It’s 18% undervalued based on an estimated value of $94, as it capitalizes on digital transformation and AI enablement. 7. **Baidu (BIDU)** - Rated 5 stars with a wide moat, Baidu is China's largest search engine and is focusing on AI and cloud services, trading 49% below a fair value estimate of $157. 8. **MongoDB (MDB)** - This company specializes in a document-oriented database and is rated 4 stars, with trading 16% below its fair value estimate of $290. The Morningstar Global Next Generation Artificial Intelligence Index focuses on firms innovating in areas like generative AI, AI data and infrastructure, AI software, and AI services, drawing from the Morningstar Global Markets Index. Companies must receive a positive exposure score to qualify for inclusion. Investors seeking more AI stock opportunities can explore additional recommendations.