The Artificial Intelligence (AI) Boom Is Far From Over. Here Are 4 Potential Long-Term Winners
By Google News AI ·
Recent earnings from major AI companies suggest that AI infrastructure spending could continue growing.
The four companies below are poised to capitalize on this.
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While the debate over the future of artificial intelligence (AI) infrastructure spending continues to rage on Wall Street, many corporations aren't just saying they will spend more on AI; they are backing up their words with action. So far this earnings season, we have seen that many leaders in the field are still pouring fortunes into hopes of capitalizing on what they see as a transformative opportunity.
This provides strong evidence that the ongoing AI revolution isn't over yet, and there is still time to invest in stocks that could ride this tailwind over the long run. Here are four great examples to consider: Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Advanced Micro Devices (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO).
Nvidia's indispensable role in the industry has made it one of the biggest winners of the AI revolution so far. In my view, that's likely to remain the case over the long run. Despite increased competition in the GPU (graphics processing unit) market, the company has maintained a runaway lead.
This has a lot to do with the company's wide moat, thanks to its CUDA ecosystem, which creates high switching costs. Demand for GPUs may not be quite as impressive moving forward as it has been in recent years, but Nvidia has expanded beyond its core market.
The company's existing relationships with many corporations that continue to rely on its GPUs can enable it to offer these clients other hardware and services that complement -- and work best with -- its GPUs for training, deploying, and running AI models. That puts Nvidia in a good position to ride the AI tailwind.
Microsoft is proving the doubters wrong. Some investors feared that AI would make its services obsolete, since the technology has reduced software development costs. But Microsoft has adapted. Its cloud business is booming, in part thanks to its library of AI services. It has also integrated AI across its productivity suite.
Meanwhile, the company boasts a massive and rapidly growing cloud backlog. These are all signs that Microsoft may continue cashing in on AI, at least over the next few years. And beyond that, the company's ability to deliver consistent revenue and earnings, strong cash position, and innovative capabilities grant it the opportunity to tap into an AI market that could continue to expand over the long run.
Advanced Micro Devices has also benefited from an increased demand for GPUs, although it has played second fiddle to Nvidia in that market. However, the company is now seeing soaring demand for CPUs (central processing units). Recent financial results have been excellent, particularly for the company's data center segment. The advent of AI agents -- which run on CPUs -- could be a powerful long-term tailwind.
In fact, it has even surprised management. AMD has increased its 2030 total addressable opportunity guidance several times over the past year. The company could face more competition, but it also benefits from a competitive edge. It boasts significant technological expertise in this industry -- where it has been a leader for decades -- deep relationships with corporations, and high switching costs.
All good reasons why AMD's outlook appears attractive.
Broadcom could become increasingly important in the AI…
Originally published by Google News AI
