In the last three weeks, the AI ​​bubble has burst. Investors are demanding a higher return on AI spending, while others like Elliott Management have raised questions about valuations. However, the recent sell-off has thrown out some of the best AI stocks with the bathwater.

Going forward, AI stocks will be subject to greater scrutiny. Investors want to see a return on investment and actual AI revenue. Only stocks with demonstrable and real AI use cases will get a boost.

The three stocks discussed below are already generating billions in AI revenue. What’s more, their executives have outlined the high demand they’re seeing in their recent quarterly calls. In fact, all of them said they’re struggling to meet demand because they’re supply-constrained. After being unfairly punished in the recent sell-off, these three companies are among the best AI stocks to buy.

Microsoft (MSFT)

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Although Microsoft (NASDAQ:MSFT) received mixed reactions following its recent Q4 results, it is nonetheless one of the most obvious AI investments. The biggest point of contention was its Azure cloud numbers, where it only hit the low end of its forecast. Putting the numbers in context, however, Azure public cloud grew 30% year-over-year, the highest growth rate among the top three cloud providers.

In short, the market is not worried, and Microsoft is one of the best AI stocks to buy today. As for Azure’s growth, management has issued a forecast for 28.5% growth in the first quarter of 2025. The positive forecast reinforces management’s view that the adoption of its AI services running on Azure will accelerate in the second half of the year.

In addition to Azure AI, Microsoft has several AI revenue streams. On the quarterly earnings call, management announced that Microsoft 365 Copilot users grew by over 60% quarter-over-quarter. Another AI product, GitHub Copilot, is very popular, with over 77,000 organizations using it. In addition, over 480,000 organizations use AI-powered capabilities on the Power Platform. At the end of the quarter, the product had over 48 million users, up 40% year-over-year.

The examples above show that this technology giant has numerous opportunities to make money with AI. Bank of America (NYSE:BAC) sees the company as a uniquely positioned AI winner and has raised its price target to $510. This target represents over 27% upside from current levels.

Advanced Micro Devices (AMD)

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Driven by AI demand, Advanced micro devices (NASDAQ:AMD) delivered impressive second-quarter results. Among semiconductor stocks, it’s a versatile AI exposure and is a bargain after falling nearly 40% from its March highs.

When it comes to AI revenue, AMD benefits in several ways. First, in the data center market, where it NVIDIA (NASDAQ:NVDA), the company reported explosive growth in the second quarter. Revenue from its data center business increased 115% year-over-year to $2.8 billion, driven by strong demand for its Instinct accelerators. MI300, its AI data center chip, surpassed the $1 billion mark in quarterly revenue for the first time.

Second, the company is seeing huge demand for its AI-enabled Ryzen processors. These processors offer industry-leading performance and feature the fastest neural processing units. They have been adopted by customers such as HP (NYSE:HPQ) And Lenovo (OTCQB:LNVGYThe first notebooks of the Ryzen AI 300 series are already on the market and are receiving very positive reviews.

Due to the early success of Ryzen processors, CEO Lisa Su expects market share gains, especially in Copilot Plus PCs. This leadership position and the increasing frequency of innovation from AI accelerators point to increasing momentum going forward. Against this backdrop, management expects 15% quarter-over-quarter growth in the third quarter and unprecedented opportunities in the long term.

Taiwan Semiconductor Manufacturing (TSM)

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One of the best ways to take advantage of the ongoing AI boom is Semiconductor manufacturing in Taiwan (NYSE:TSM), a pure foundry business. Since most semiconductor designers such as Nvidia, Advanced Micro Devices and Apple (NASDAQ:AAPL) are fabless companies, they outsource their chip manufacturing. Taiwan Semiconductor has an almost unassailable lead in this area, especially in advanced nodes, and is experiencing unprecedented demand.

Today, there is no serious competitor to Taiwan Semi’s leading manufacturing and local packaging and assembly ecosystem in Taiwan. This momentum led the company to report second-quarter revenue of $20.8 billion, up 33% year-over-year and 10.3% quarter-over-quarter. Strong demand for the company’s industry-leading 3- and 5-nanometer technologies drove the impressive quarter.

In addition, management emphasized that they saw strong AI-related demand, which led to higher utilization rates. They noted that supply for 3nm and 5nm was tight and demand was solid through 2026. As a result, they raised their 2024 revenue growth forecast from the low-to-mid 20 percent to just above mid 20 percent.

Taiwan Semi dominates the foundry business and produces over 60% of the world’s logic semiconductors. But despite this dominance and the difficulties of its main competitors Intel (NASDAQ:INTC), you can buy TSM shares at market value. At a price-to-earnings ratio of 25, the stock is a real bargain.

As of the publication date, Charles Munyi had a long position in AMD, but did not hold (directly or indirectly) any other securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.

At the time of publication, the editor in charge did not hold any positions (either directly or indirectly) in the securities mentioned in this article.