The tech sector continues to be a driving force in the stock market, with artificial intelligence (AI) leading the way. With AI quickly reshaping the world we live in, this is an area where investors need some exposure if they want to benefit. Here's a look at three great tech stocks to buy now. These three stocks are hoping to be AI winners. 1. Nvidia Nvidia (NVDA -0.40%) remains the leader in AI chips by a wide margin. Its market share for graphics processing units (GPUs), which are the main chips used to ...

Core Insights - The article emphasizes the strong growth potential of leading companies in the artificial intelligence (AI) sector, highlighting five key stocks that are recommended for investment this month. Company Summaries 1. Nvidia - Nvidia dominates the AI infrastructure market, holding 92% of the GPU market share in Q1 [3] - The company has accelerated its product cycle with annual chip launches and is expanding into the automotive market due to the rise of self-driving technology [4] 2. Palantir Technologies - Palantir's AI Platform (AIP) integrates data from various sources, enabling actionable AI model outputs [5] - The company reported a 93% surge in U.S. commercial revenue in Q2, with total deal value more than doubling and a 43% increase in customer base [6][7] 3. Alphabet - Alphabet's AI initiatives have strengthened its core businesses, with a 12% year-over-year increase in search revenue and a 32% revenue jump in Google Cloud due to AI demand [9] - The company is also benefiting from its custom Tensor Processing Units (TPUs) and has seen a 13% growth in YouTube ad revenue [11] 4. Broadcom - Broadcom focuses on AI networking and custom chip design, with a 70% increase in AI networking revenue in Q1 [12] - The company estimates a $60 billion to $90 billion opportunity from its top three customers by fiscal 2027, aided by its recent acquisition of VMware [13][14] 5. GitLab - GitLab is transitioning into an AI-powered software development platform, with a 27% year-over-year sales increase in Q1 [15][16] - The company is positioned for growth with a potential shift to consumption-based pricing, despite its stock being valued attractively at a forward price-to-sales ratio of 7 times 2025 estimates [17]

Core Viewpoint - Alphabet is positioned as the best investment choice among the "Magnificent Seven" stocks, with significant potential upside in various sectors including search, AI infrastructure, autonomous driving, and quantum computing [1]. Group 1: Search and Advertising - Concerns about AI chatbots replacing traditional search are prevalent, but AI queries are more expensive to run compared to traditional searches, which supports Alphabet's ad-supported search model [3]. - Alphabet's dominance in search is reinforced by its ownership of distribution channels, including the Android operating system and Chrome browser, as well as revenue-sharing agreements with Apple and other browsers [3]. - The company has built one of the largest digital advertising platforms, with user-friendly self-serve ad tools that cater to businesses of all sizes [4]. Group 2: Monetization Opportunities - Currently, only about 20% of Alphabet's searches include ads, indicating substantial room for growth in monetization [5]. - New AI-powered features like "Shop by AI" and virtual try-ons are being introduced, enhancing user experience and creating additional monetization avenues [5]. - The integration of AI and traditional search is likely to be complementary, with many users expected to continue using free, ad-based search options [6]. Group 3: Cloud Computing - Google Cloud is experiencing significant growth, with a 28% increase in revenue and a 142% surge in operating income last quarter [7]. - The Vertex AI platform is attracting customers for building and managing AI models, while Alphabet's Gemini foundational model provides a competitive edge [8]. - Custom-built Tensor Processing Units (TPUs) are designed to optimize AI workloads, offering both power and energy efficiency compared to traditional GPUs [9]. Group 4: Future Technologies - Alphabet is entering the AI chip market with the launch of Ironwood, a TPU designed for inference, which is expected to grow significantly [11]. - Waymo, Alphabet's autonomous driving subsidiary, is expanding rapidly and has shown strong usage metrics, indicating a promising future despite current unprofitability [12]. - The company is also making strides in quantum computing with its Willow chip, which has demonstrated a significant reduction in error rates [13]. Group 5: Valuation - Alphabet is currently trading at a forward price-to-earnings (P/E) ratio of just over 18 times 2025 analyst estimates, suggesting it is undervalued compared to its market position [14]. - The company holds leading positions across multiple sectors, making it an attractive option for long-term investors seeking a technology leader at a reasonable price [15].

Core Viewpoint - The artificial intelligence (AI) investment landscape remains robust, with companies planning to invest record amounts in data centers to support growing AI workloads. Key beneficiaries include Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing [1][2]. Group 1: Nvidia - Nvidia holds approximately 90% market share in the data center GPU market, driven by its superior GPU technology and software [4]. - The stock trades at 37 times forward earnings, down from around 45 times in the previous year, indicating potential for further price appreciation [5]. - Nvidia is positioned as a strong long-term investment opportunity [7]. Group 2: Broadcom - Broadcom is developing custom AI accelerators, known as XPUs, which can outperform traditional GPUs for specific tasks, potentially reducing reliance on Nvidia [8][9]. - The company anticipates its AI revenue to grow significantly, projecting between $60 billion and $90 billion by fiscal year 2027, up from $12.2 billion in FY 2024 [10]. - Broadcom's strategic partnerships and contracts, such as with Google for Tensor Processing Units, position it well for future growth [10]. Group 3: Taiwan Semiconductor Manufacturing (TSMC) - TSMC is the leading chip manufacturer for both Nvidia and Broadcom, providing essential fabrication services [11]. - The company is investing $165 billion in its Arizona facility, which will help mitigate concerns regarding its proximity to China [12]. - TSMC expects nearly 20% compounded annual growth rate (CAGR) in revenue over the next five years, indicating strong long-term growth potential [13][14].

Core Viewpoint - Technology stocks, particularly those involved in artificial intelligence (AI), are expected to continue leading market growth, with several key companies positioned to benefit from this trend. Group 1: Nvidia - Nvidia is a dominant player in AI infrastructure, with its GPUs driving significant growth in data centers, achieving a 69% year-over-year revenue increase to $44.1 billion, and a 73% rise in data center sales to $39.1 billion [2][4] - The company holds a 92% market share in the GPU space, supported by its CUDA software platform, which has established a strong competitive advantage [4] - As AI infrastructure spending increases, Nvidia is well-positioned to capitalize on this trend [4] Group 2: Advanced Micro Devices (AMD) - AMD is also benefiting from the AI infrastructure expansion, with a 36% year-over-year revenue increase and a 57% growth in its data center business [5][6] - While it trails Nvidia in GPUs, AMD has established itself as a leader in CPUs for data centers and is focusing on AI inference, which is expected to grow significantly [6][7] - Small market share gains in inference could lead to substantial growth for AMD [7] Group 3: Meta Platforms - Meta Platforms is emerging as a leader in digital marketing AI, utilizing its proprietary AI model, Llama, to enhance user engagement and improve ad effectiveness, resulting in a 5% increase in ad impressions and a 10% rise in ad prices [8][9] - The company is expanding its advertising capabilities on platforms like WhatsApp and Threads, which have large user bases, positioning itself for future growth [9] Group 4: Alphabet - Alphabet remains well-positioned despite concerns about AI disrupting its search business, benefiting from its extensive distribution network and a strong advertising platform [10][11] - Google Cloud's revenue grew by 28%, driven by customers building AI models, and the company is leveraging its custom AI chips, TPUs, for internal improvements and external partnerships [12] - The Waymo robotaxi business shows strong demand and expansion potential, contributing to Alphabet's innovative technology portfolio [13] Group 5: Pinterest - Pinterest has focused on AI to enhance its platform's shoppability, leading to increased user engagement and average revenue per user [14] - A partnership with Google has improved monetization of its international user base, and the new ad tool, Performance+, aims to drive further growth through AI and automation [15]

Group 1: AI Stocks Overview - Successful long-term investing involves consistent, smaller steps, akin to building a house brick by brick [1] - Investing in growth stocks, particularly in high-growth industries like AI and e-commerce, can be a powerful wealth-building strategy [2] Group 2: Alphabet Inc. (GOOGL) - Alphabet is gaining momentum in AI, with its Gemini model becoming popular and Waymo advancing in autonomous vehicles [5][6] - The company is positioning itself as a well-rounded AI player, with a current P/E ratio of 20, indicating a compelling valuation [7] Group 3: Amazon.com Inc. (AMZN) - Amazon is benefiting from AI, which is enhancing cloud demand and potentially transforming its e-commerce business by automating supply chains [8][9] - The company is testing robotics for delivery, which could significantly reduce workforce needs and improve profit margins, despite a P/E ratio of 36 [10][11] Group 4: C3.ai (AI) - C3.ai is highlighted as a promising AI software stock, with potential to improve business performance across various industries [12] - Despite not being profitable, C3.ai's valuation at 8 times sales is more attractive compared to Palantir's high valuation of 108 times sales, making it a potentially superior investment [13][14]