2 Top Artificial Intelligence Stocks to Buy Right Now

Artificial intelligence (AI) is currently the hottest topic on Wall Street. Certain newspaper titles are essential in this space, and for good reason. Many companies are also doing everything they can to demonstrate their AI credentials, regardless of the legitimacy of their claims.

However, some companies have flown somewhat under the radar while posting impressive results and benefiting from legitimate tailwinds from the current AI boom. Here are two companies that might be the best AI Actions buy now.

1. Arista Networks

When you hear about AI, these are often companies rushing to buy the semiconductor chips needed to train the large language models (LLMs) that power consumer-facing products like ChatGPT. However, it’s important to keep in mind that many of these chips end up in the data centers of the world’s biggest tech companies. In these companies’ data centers, servers are connected by routers and switches, and a large percentage of these routers and switches are powered by Arista Networks (NYSE:ANET).

As tech giants like Metaplatforms And Microsoft to grow their data center footprint, Arista is a critical partner. The financial results demonstrate how important this relationship has been to Arista. Thirty-nine percent of Arista’s total revenue comes from Meta and Microsoft.

In the first quarter of 2024, Arista reported 16% year-over-year revenue growth. Although this was a slowdown compared to previous quarters, profitability remained strong. Net profit increased 46% compared to the year-ago quarter. This impressive increase in net income was driven by an improvement in gross margin, which jumped by more than 4 percentage points compared to the first quarter of 2023, as well as a reduction in operating expenses as a percentage of revenue. business.

2. Broadcom

Broadcom (NASDAQ:AVGO) is a provider of semiconductor hardware and software for a variety of products such as wireless routers and mobile phones. Much like Arista, Broadcom relies on relationships with large technology companies with AI aspirations. For example, Apple represents approximately 20% of Broadcom’s total revenue.

Broadcom recently released its results for its fiscal 2024 second quarter, ended May 5, and the results were impressive. Revenue grew 43% year over year to $12.5 billion. Revenue from AI products grew 280% and accounted for about 25% of the total, demonstrating that Broadcom is benefiting from the rush to develop AI capabilities of the world’s largest technology companies.

There is one caveat to Broadcom’s revenue growth that investors should be aware of. The company recently acquired infrastructure software company VMWare, which contributed significantly to results. Excluding VMWare revenue, revenue growth would have been 12%.

For the full year, Broadcom expects revenue from AI products to be approximately $11 billion, which management says is a conservative estimate, suggesting that it there is a possibility of further development…

Read Complete News ➤

Leave a Reply

Your email address will not be published. Required fields are marked *

fourteen − 10 =