2 Best Artificial Intelligence Stocks to Buy in July

Industry Overview - The spending on artificial intelligence (AI) infrastructure is projected to reach $6.7 trillion by 2030, with nearly half allocated to chips and AI data centers [2] - Companies involved in chip manufacturing and AI infrastructure are expected to maintain strong growth momentum over the next five years due to this spending [1] Company: Micron Technology - Micron Technology has experienced a decline of over 6% in stock price due to negative sentiment regarding potential sales slowdowns affecting memory prices [5] - UBS forecasts a 35% increase in demand for high-bandwidth memory (HBM) used in AI chips by 2026, alongside an 18% rise in prices [6] - Deutsche Bank anticipates significant revenue growth for Micron, projecting a price target of $150, with HBM being a key driver for revenue and margin expansion [6] - HBM is expected to generate a gross margin of 60%, compared to 35% for non-HBM DRAM, with the HBM market revenue projected to grow at an annual rate of 42% through 2033, potentially reaching $130 billion [7] - Micron could capture nearly 25% of the HBM market by 2033, translating to $32 billion in revenue, which is nearly five times the expected HBM revenue for the current fiscal year [7][9] - The company has a long-term capital expenditure plan of $200 billion to enhance production capacity, positioning it to capture a significant share of the HBM market [10] - Micron is currently trading at 20 times trailing earnings, suggesting potential for substantial bottom-line growth [10] Company: CoreWeave - CoreWeave's stock has dropped nearly 25% in July, influenced by a report from HSBC that set a price target of $32, significantly lower than its current price [11] - The company relies heavily on two customers, Microsoft and OpenAI, for 72% of its revenue, which poses a risk [11] - CoreWeave faces a high cost structure, spending over a third of its revenue on GPU maintenance, and needs to diversify its offerings beyond hardware rentals to remain competitive [12] - Despite recent stock pressure, CoreWeave's revenue surged over fivefold in the first quarter to $981 million, with a revenue backlog of $26 billion [13] - The company secured a new contract worth over $11 billion from OpenAI and expanded an existing contract by $4 billion [14] - CoreWeave is enhancing its software capabilities, having acquired AI developer platform Weights and Biases, and introduced new developer tools [15] - The addressable market for CoreWeave in cloud infrastructure-as-a-service is estimated to reach $400 billion by 2028, indicating significant growth potential [16] - Investors may view the recent dip in CoreWeave's stock as a buying opportunity due to its substantial revenue pipeline and market potential [18]