2 Best AI Stocks to Buy in December

Core Viewpoint - AI stocks are currently available at discounted prices due to negative sentiment following earnings results from Oracle and Broadcom, creating potential investment opportunities in the sector [1][2]. Group 1: Oracle and Broadcom Earnings Impact - Oracle's stock declined as investors expressed concerns over OpenAI's ability to finance its $300 billion cloud computing deal, excluding its agreements with AI chipmakers [2]. - Broadcom reported strong AI sales but faced margin concerns, leading to a stock decline after earnings, with anticipated margins dropping by approximately 1% in Q1 FY26 [2]. Group 2: Iren's Market Position - Iren, an Australia-based AI specialist, is addressing energy bottlenecks in data centers and has signed a significant five-year, $9.7 billion deal with Microsoft, highlighting its potential [5]. - Despite a nearly 50% drop from its peak in early November, Iren's stock decline is viewed as an overreaction, as its performance is not directly related to Oracle or Broadcom's issues [6]. - Iren aims to generate $3.4 billion in annual recurring revenue by the end of fiscal 2026, a substantial increase from $16.4 million in fiscal 2025 revenue from AI cloud services [7][8]. Group 3: Alphabet's Competitive Advantage - Alphabet has evolved from a search engine to a diversified business, including cloud services and AI chip development, positioning it as a leading AI stock [10][11]. - The company benefits from strong financials and cash flow, allowing it to invest heavily in AI initiatives without balance sheet concerns, unlike smaller speculative AI stocks [12]. - Alphabet's Q3 revenue increased by 18% year over year, with Google Cloud revenue surging by 34%, indicating strong market share growth in AI [13]. - The company's AI ventures, particularly its Gemini AI model, could enhance its market position, potentially making it the most valuable company, surpassing Nvidia [14].