2 AI Stocks to Watch for Explosive Growth

Published Date: 20/06/2024

Broadcom and Oracle are two tech stocks that are already benefiting from the proliferation of AI. Shares of both companies have shot up impressively of late following their latest quarterly reports, and they seem all set to go parabolic.

Artificial intelligence (AI) has turned out to be a massive catalyst for technology stocks in the past year or more, and that's not surprising as companies and governments around the globe are opening their wallets to speed up the adoption of this technology that's expected to contribute big time to the global economy.

PwC expects AI to contribute a whopping $15.7 trillion to the global economy by 2030. As a result, global spending on AI-related hardware, software, and services is expected to hit a whopping $900 billion in 2026. The good news for investors is that there are many ways in which they can capitalize on the booming demand for AI.

Broadcom (NASDAQ  AVGO) and Oracle (NYSE  ORCL) are two such companies that are already benefiting from the proliferation of AI. Shares of both companies have shot up impressively of late following their latest quarterly reports, and they seem all set to go parabolic.A parabolic move refers to a steep spike in a company's stock price in a short time, similar to the right side of a parabolic curve.

Whether or not that happens, let's look at some solid reasons why these two tech stocks would be good investments now.1. Broadcom\nSemiconductors are in hot demand thanks to the crucial role they're playing in training and deploying AI models, which is precisely the reason why Broadcom has just raised its full-year growth outlook. The company released fiscal 2024 second-quarter results (for the three months ended May 5) on June 12 and raised its revenue guidance from sales of AI chips to $11 billion for the full year, up from $10 billion.

Broadcom has also increased its full-year revenue guidance to $51 billion from an earlier estimate of $50 billion. The company attributes the improved outlook to the robust demand for its networking solutions and custom AI chips that are deployed in data centers.\n\n2. Oracle\nOracle stock popped impressively following the release of its fiscal 2024 fourth-quarter results (for the three months ended May 31) on June 11. Investors cheered the massive jump in the company's revenue pipeline, which was driven by the growing demand for its generative AI cloud infrastructure.

More specifically, Oracle's remaining performance obligations (RPO) increased a terrific 44% year over year to $98 billion. That was faster than the 29% increase in this metric in the fiscal third quarter and also outpaced the 4% growth in Oracle's revenue during the quarter to $14.3 billion.

Oracle is a multinational technology corporation that specializes in developing and marketing computer hardware systems, enterprise software products, and cloud computing services.\nBroadcom is a leading designer, manufacturer, and supplier of analog and digital semiconductor connectivity solutions.

FAQs:

Q: Why are AI stocks performing well?

A: AI stocks are performing well due to the growing demand for AI-related hardware, software, and services, which is expected to contribute significantly to the global economy.

Q: What is the expected growth of the AI market?

A: The AI market is expected to grow at a whopping 31% annual growth rate through 2030.

Q: Why is Broadcom a good investment?

A: Broadcom is a good investment due to its strong growth prospects in the AI market, driven by its custom AI chips and networking solutions.

Q: Why is Oracle a good investment?

A: Oracle is a good investment due to its strong growth prospects in the cloud AI market, driven by its generative AI cloud infrastructure.

Q: What is a parabolic move in stock prices?

A: A parabolic move refers to a steep spike in a company's stock price in a short time, similar to the right side of a parabolic curve.

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