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What Are 3 Great Tech Stocks to Buy Right Now?
Technology continues to evolve and change the world we live in, and thus, perhaps it should be no surprise that tech stocks have helped lead the market over the past few decades. With the emergence of artificial intelligence (AI), this should continue to be the case.
Let’s look at three great AI stocks to buy right now.
Spending on AI infrastructure is booming, with the five largest hyperscalers (owners of large data centers) projected to spend an incredible $700 billion on AI data centers this year alone. That number is mind-blowing, as it’s more than the gross domestic product (GDP) of all but 24 countries. One of the companies set to benefit the most from this spending is Nvidia (NVDA +3.79%), whose graphics processing units (GPUs) are used to train large language models (LLMs) and run AI inference.
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NASDAQ: NVDA
Nvidia
Today’s Change
(3.79%) $6.83
Current Price
$187.08
Key Data Points
Market Cap
$4.4T
Day’s Range
$182.87 - $187.18
52wk Range
$86.62 - $212.19
Volume
5.6M
Avg Vol
175M
Gross Margin
71.07%
Dividend Yield
0.02%
While competition in the AI chip space is increasing, demand for Nvidia’s chips remains insatiable. The strong ecosystem it has built around its chips, including its CUDA software platform and networking portfolio, means it is always going to have a seat at the table. Meanwhile, the company made a smart move by licensing the technology of Groq and hiring its talent, which could give Nvidia a leg up down the road in the inference market.
Image source: Getty Images.
As the only hyperscaler that isn’t largely reliant on Nvidia’s GPUs, Alphabet (GOOGL +1.08%) (GOOG +0.78%) is in an enviable position. The company developed its own custom ASICs (application-specific integrated circuits) over a decade ago and has used them to power most of its internal workloads. While other companies are also looking to develop custom AI chips, Alphabet is just much further along at this point in the game.
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NASDAQ: GOOGL
Alphabet
Today’s Change
(1.08%) $3.27
Current Price
$305.55
Key Data Points
Market Cap
$3.7T
Day’s Range
$303.02 - $306.49
52wk Range
$140.53 - $349.00
Volume
13M
Avg Vol
33M
Gross Margin
59.68%
Dividend Yield
0.28%
This ultimately gives Alphabet a big cost advantage when it comes to training its Gemini AI model and running inference. It can do this at a much cheaper cost than rivals, and so, in a smart move, it is pouring money into AI infrastructure this year. While some competitors may be spending similar amounts, Alphabet is getting a whole lot more bang for its buck. Also not to be overlooked is that Alphabet is able to better monetize its AI models by incorporating them within its products, including Google search, and through its vast ad network.
This just creates a virtuous circle where Alphabet can spend more money to make its models better, which drives growth with its products, which it can then use to put more money into improving its chips and expanding its AI infrastructure. And as AI infrastructure demands expand, this advantage only increases. This is why Alphabet is a top tech stock to own.
Another company that is enjoying the flywheel effect of AI is Meta Platforms (META +2.16%). Notably, the virtuous cycle it is seeing operates in a very different way than Alphabet’s, which is more about using custom chips to lower the cost of building its AI models and running its cloud computing operations. Instead, the flywheel effect Meta is experiencing revolves around the company using AI to drive user engagement and improve the effectiveness of its ads, which allows it to pour more money into these initiatives to continue to power its growth.
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NASDAQ: META
Meta Platforms
Today’s Change
(2.16%) $13.27
Current Price
$626.45
Key Data Points
Market Cap
$1.6T
Day’s Range
$623.16 - $634.75
52wk Range
$479.80 - $796.25
Volume
1.4M
Avg Vol
15M
Gross Margin
82.00%
Dividend Yield
0.34%
With AI, Meta is now able to see users’ interests across its platforms simultaneously to better understand them. It can also now recognize what is inside a video or photo without having to rely on creator captions or hashtags. This is helping it feed users more of the content they are interested in, leading them to spend more time on its sites and allowing it to serve more ads. At the same time, it is using AI to improve the effectiveness of its ads, from the creative to the targeting, to the bidding. This includes its Andromeda retrieval layer, which decides which ads can even qualify to compete in an auction based on the relevance of the ads to the user.
Meta is using AI to just get better and better at this, driving growth, and its spending is helping separate it from the pack. This makes the stock a long-term AI winner.