In 2025, U.S. stocks have not met expectations. The return of President Donald Trump to protectionist economic strategies has put immense pressure on major tech firms, which have been key drivers of the S&P 500‘s (^GSPC 1.08%) outstanding performance since October 2022.
While fluctuations in the market may be disconcerting in the short term, they do present valuable chances to invest in future market leaders at considerable discounts compared to their long-term capabilities.
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Artificial intelligence (AI) stocks illustrate this opportunity well. Despite experiencing significant growth over the past two years, many top-performing AI companies have faced sharp declines since early 2025. Here are two AI stocks I continue to buy during these downturns, planning to keep them for the long term.
Archer Aviation Surges Beyond Traditional Aviation
Even though Archer Aviation (ACHR 3.08%) shares have dropped nearly 17% this year, the company, specializing in electric vertical takeoff and landing, presents a promising opportunity with its current market cap of $4.4 billion. Archer has transformed into an AI stock due to strategic collaborations with Palantir Technologies and Anduril Industries, utilizing Palantir’s Foundry and Artificial Intelligence Platform (AIP) to innovate aviation systems ensuring better air traffic management and route planning.
The commercial potential in defense and aviation markets is substantial, with Archer already securing Abu Dhabi Aviation as a customer for its “Launch Edition” program. The firm stands to gain defense contracts through its arrangement with Anduril Industries, which focuses on autonomous military capabilities. With over $1 billion in liquidity, Archer boasts one of the industry’s healthiest balance sheets, ensuring it has the resources to realize its AI-driven vision for future aviation.
Innovative Autonomous Delivery with Serve Robotics
Despite a significant 46% drop this year, Serve Robotics (SERV 2.50%) is transforming last-mile delivery through its AI-enabled sidewalk robots. The company achieved impressive 773% year-over-year revenue growth, reaching $1.8 million in 2024, indicating its rapidly growing market acceptance. Serve is also broadening its operations beyond Los Angeles to include Miami and other significant markets such as Dallas-Fort Worth and Atlanta.
Additionally, Serve has finalized the design for its third-generation robots, offering enhanced performance capabilities, including double the speed, increased range, and five times the AI computational power at about 65% lower production costs than earlier iterations. Collaborating with Magna International and Shake Shack, Serve has extended its services to over 1,000 restaurants and 300,000 homes. With $123 million in cash at the end of 2024 and an extra $80 million raised in early 2025, Serve is well-equipped to deploy 2,000 robots across the U.S. by the end of 2025.
Navigating the Balance of Risk and Reward
While these AI trailblazers offer significant growth potential, investors should be aware of the inherent risks. Archer Aviation must navigate challenging regulatory requirements for broad commercial certification, and Serve Robotics needs to prove its scalability in various urban landscapes. Both companies currently generate limited revenue when measured against their market valuations and may need additional funding, despite their robust cash reserves.
However, these challenges appear to be factored into their relatively modest valuations, particularly when weighed against their long-term growth possibilities. Consequently, the current market reluctance toward growth stocks has created an attractive entry point for investors willing to withstand short-term fluctuations while these innovative tech firms execute their strategic plans. This is my stance during this uncertain time—leveraging it to build positions in both of these groundbreaking AI companies.
George Budwell holds positions in Archer Aviation, Palantir Technologies, and Serve Robotics. The Motley Fool is involved with and recommends Palantir Technologies and Serve Robotics, and recommends Magna International. The Motley Fool has a disclosure policy.
