2 AI Stocks That Could Go Parabolic

Core Insights - The article discusses the rising interest in AI stocks, particularly those in the "Magnificent Seven," which have significantly contributed to the S&P 500's record highs due to their potential to save time and money and drive innovations [1][2] Group 1: Alphabet - Alphabet is identified as the second-cheapest stock among the "Magnificent Seven," trading at 27 times forward earnings estimates, which is considered reasonable given its strong business performance [3][5] - The company has a market capitalization of $3,365 billion and reported a 12% increase in advertising revenue to $74 billion, while Google Cloud revenue surged 34% to $15 billion [5][6] - Alphabet achieved its first $100 billion quarter, indicating a doubling of revenue over five years, and is expected to continue benefiting from demand for AI infrastructure and solutions [6][7] Group 2: Meta Platforms - Meta Platforms is the least expensive stock in the "Magnificent Seven," trading at 24 times forward earnings estimates, with a market cap of $1,567 billion [8][10] - The company has invested heavily in AI, which may have raised concerns among investors, but CEO Mark Zuckerberg reassured that high demand for compute exists, and the company can adjust its growth strategy if necessary [10][11] - Meta primarily generates revenue through advertising on its social media platforms, and its AI investments aim to enhance user engagement and improve advertising results, potentially leading to increased future revenue [11][12]