One Wall Street Analyst Says This Stock Is the Best Way to Invest in Anthropic and OpenAI. He's Right. - Yahoo Finance
By Google News AI ·
Anthropic and OpenAI could become two of the biggest and most anticipated IPOs of this decade, joining current leader SpaceX, which went public in June. The artificial intelligence (AI) labs are arguably among the most influential companies driving the AI boom, with both seeing rapid growth and demand for their models. In fact, their breakthroughs have been key catalysts for the massive data center infrastructure investments we are seeing today.
However, D.A. Davidson analyst Gil Luria thinks that the best way to profit from the successes of these AI giants isn't by buying their shares following their upcoming IPOs, but by investing in chip designer Broadcom (NASDAQ: AVGO), and I agree. Luria said that this is the cheap way to play both stocks. He noted that Anthropic and OpenAI are poised to become Broadcom's largest ASIC (application-specific integrated circuit) customers in the next few years. Ironically, Broadcom's ties to these two AI labs are one of the biggest reasons for its recent share price weakness, but ultimately, its success will be tied to their success.
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Luria said that after reading Anthropic's prospectus, he is convinced the company will move forward with its IPO and raise additional capital. Anthropic already has $131 billion in cash on its balance sheet, and the D.A. Davidson analyst believes the AI lab's approximately 50% gross margins justify it continuing to spend aggressively. Anthropic currently has $161 billion in commitments with Broadcom. He also expects that OpenAI will…
Originally published by Google News AI
