“AI requires exponentially more computing power and capacity than previously imagined.”.”
— black stone CEO Stephen Schwartzman
There is a gold rush happening in artificial intelligence (AI). Companies that can provide a “pick and shovel” are likely to deliver wealth-building returns to investors. This means cutting-edge chips and associated computing infrastructure to power cutting-edge machine learning applications.
Meet two technology leaders who are providing this critical computing power. Both of these AI stocks are particularly strong buys today.
Advanced Micro Devices
Nvidia It is attracting a lot of attention among AI chip manufacturers. That's certainly understandable. The semiconductor giant is designing cutting-edge chips that enable popular AI applications such as OpenAI's ChatGPT. But with so many companies rushing to improve productivity and efficiency through AI, they need more chips. Advanced Micro Devices (NASDAQ: AMD) Ready to feed them.
AMD's first quarter sales were $5.5 billion, up 2% year over year. However, these sales figures belie the company's promising growth prospects. Chip designers' data center revenue rose 80% to $2.3 billion as companies procured AMD's latest graphics processing units (GPUs) and central processing units (CPUs) to power cloud computing operations. Ta.
Revenue in the company's client division rose an even more impressive 85% to $1.4 billion, driven by strong sales of its AI-enabled Ryzen 8000 series processors. These explosive growth metrics were offset by a decline in video game-related sales, but sales should rebound as console manufacturers launch new devices in the coming years.
Chip buyers are keen to foster competition in the supply-constrained AI semiconductor market.The tech giants are microsoft and meta platform Enterprises are jumping at the chance to deploy AMD's new MI300 accelerators that can accelerate machine learning workloads in their data centers. At the same time, computer manufacturers prefer: HP and Dell is equipping its latest PC series with AMD's AI-enabled Ryzen processors.
There are huge opportunities in the data center market alone. CEO Lisa Su predicts that demand for AI accelerators could soar to $400 billion by 2027. For reference, AMD expects data center chip sales to be around $4 billion in 2024.
super microcomputer
Strong demand for AI chips has also led to increased sales of the computing hardware that supports them. super microcomputer (NASDAQ:SMCI). Providers of high-performance servers, data storage systems, and other AI-optimized equipment are experiencing impressive growth. But today, you have an opportunity to pick up the company's stock at a deep discount to recent highs.
Supermicro (as the company is known) saw its revenue triple to $3.85 billion in the quarter ended March 31. Net income increased an even more astonishing 367% to his $402 million. Supermicro is gaining market share in the fast-growing AI infrastructure market. The server specialist company has close ties to his Nvidia, so it benefits disproportionately from the chipmaker's strong demand for his AI products.
However, despite these impressive growth metrics, Supermicro's stock price has retreated from the price it reached earlier this year. The stock is currently down about 35% from its all-time high. The stock trades at about 33 times management's 2024 adjusted earnings per share forecast. That's quite a bargain for an AI hardware leader whose earnings per share are expected to grow more than 60% annually over the next five years.
Investing in blue-chip companies poised to profit from the AI revolution is a smart strategy for accumulating wealth when stocks are temporarily on sale. Today, super microcomputers have one such opportunity.
Should you invest $1,000 in a super micro computer right now?
Before buying Super Micro Computer stock, consider the following:
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Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Joe Tenebruso has no position in any stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Blackstone, HP, Meta Platforms, Microsoft, and his Nvidia. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
2 Artificial Intelligence (AI) Stocks to Buy Now that Could Make You a Fortune was originally published by The Motley Fool.