The first half of 2025 is officially in the books, and despite the S&P 500 (^GSPC 0.52%) logging a gain of around 5% for the period, it certainly wasn't smooth sailing for investors. The index was sitting on a year-to-date loss of 15% at its low point in April, after President Donald Trump announced plans to impose tariffs on imported goods from all of America's trading partners.

Even though the broader market has recovered, some growth stocks like SentinelOne (S 2.52%) and Alphabet (GOOG -0.43%) (GOOGL -1.19%) are still trading in the red for the year. However, a rebound might be in the cards for those two names during the second half of 2025, given the strength of their underlying businesses and their leadership positions in areas like artificial intelligence (AI).

Here's why SentinelOne and Alphabet might be two great stocks to own in the final six months of this year.

Image source: Getty Images.

The case for SentinelOne

SentinelOne developed an AI-powered cybersecurity platform called Singularity, which offers comprehensive protection for cloud networks, employee identities, endpoints (computers and devices), and more. It autonomously tracks and eliminates threats, and it can even produce detailed summaries of each incident to save human managers from completing hours of manual investigative work.

Purple AI is SentinelOne's AI-powered virtual assistant that is embedded in Singularity to help employees speed up cybersecurity workflows. But in April, the company launched a new version called Purple AI Athena with expanded capabilities. It's an AI agent designed to think and reason like a highly experienced human, but at machine speed so it's far more effective. It learns from security incidents and helps managers set up automated workflows that allow it to remediate similar events in the future.

SentinelOne generated $229 million in total revenue during its fiscal 2026 first quarter (ended April 30). It was a 23% increase from the year-ago period, which was a solid growth rate at face value, except it represented a deceleration from the 29% growth the company delivered in the previous quarter three months earlier. Plus, management actually reduced its full-year forecast for fiscal 2026 by around 1%, to $998.5 million (at the midpoint of the guidance range).

Management cited macroeconomic uncertainties for the downward revision, even though SentinelOne isn't directly affected by the recent global trade turmoil because it sells digital software products, and penalties like tariffs primarily affect physical imports. However, its customers come from many different industries and if their businesses suffer a slowdown, they might cut their cybersecurity spending.

Fortunately, the majority of Trump's most aggressive tariffs were rolled back after April, so this might be less of a concern for SentinelOne in the coming quarters. That presents investors with an interesting opportunity, because its stock is still down by 20% this year. Moreover, it's significantly cheaper than its rivals in the AI-powered cybersecurity space, based on its price-to-sales (P/S) ratio of 6.6:

CRWD PS Ratio data by YCharts

As a result, I think the setup looks great for a potential rebound in SentinelOne stock in the second half of 2025.

The case for Alphabet (Google)

Alphabet is the parent company of Google, YouTube, DeepMind, and self-driving car powerhouse Waymo. The majority of the conglomerate's revenue comes from the advertising dollars generated by Google Search, but this valuable income stream remains under threat by the growing adoption of AI chatbots, which are stealing traffic from traditional internet search engines.

To combat this, Alphabet launched AI Overviews, which appear above the traditional Google Search results. They combine text, images, and links to third-party sources to answer users' queries, saving them from having to sift through web pages to find the information they need. Alphabet is hoping this creates enough convenience to stop people from abandoning Google Search, and it seems to be working as planned because at the end of the first quarter of 2025, the company said 1.5 billion people were using Overviews every month.

But Alphabet also used its Gemini family of large language models (LLMs) to launch its own AI chatbot of the same name, so it's competing with the likes of OpenAI for the attention of users who prefer these tools over traditional search engines. Plus, Alphabet has embedded Gemini into Google Workspace applications like Docs, Sheets, and Gmail, which should prevent users from venturing outside its ecosystem in the hunt for information.

Finally, Google Cloud deserves a special mention because it's regularly the fastest growing piece of the entire Alphabet conglomerate. Google Cloud operates state-of-the-art data centers filled with AI chips from leading suppliers like Nvidia, and leases the computing capacity to businesses for profit. Plus, its Vertex AI platform offers developers access to more than 200 foundation models (like Gemini) which they can use to accelerate their AI software projects.

Alphabet generated $90.2 billion in total revenue in the first quarter of 2025, which was up 12% from the year-ago period. That included $50.7 billion in Google Search revenue, which grew by 10%, and $12.2 billion in Google Cloud revenue, which was up 28%. The company also delivered $2.81 in earnings per share (EPS), which takes its trailing-12-month EPS to $8.97.

Based on that trailing EPS figure, Alphabet stock is trading at a price-to-earnings (P/E) ratio of just 19.8 as of this writing (June 28), which makes it the cheapest member of an elite group known as the "Magnificent Seven." These seven companies are at the cutting edge of most segments of the tech industry, including AI:

PE Ratio data by YCharts

Alphabet stock is trading at a discount right now because of its ongoing legal battle with the Department of Justice (DOJ), which won a verdict that the conglomerate engages in monopolistic practices. Investors are waiting for the judge to hand down a formal punishment, but the case could be tied up in court for several more years while the appeals process plays out.

However, AI could be the biggest opportunity in Alphabet's history, so services like Google Cloud and Gemini could be more important to the company's financial success from here than legacy businesses like Google Search (which is the subject of its legal woes). I think Alphabet's attractive valuation sets the stage for a strong second half of 2025, as investors turn more of their attention to the success of its AI products and services.