| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
| $116.55 | 43.74B | 1.50 | 0.12% | Industrials | 27,000 | 7 mins ago | |||
| $136.14 | 3.33T | 2.53 | 0.03% | Technology | 29,600 | 1 second ago | |||
 Broadcom Inc. AVGO | $228.49 | 1.07T | 1.28 | 1.17% | Technology | 20,000 | 10 mins ago |
Welcome to a summer ripe with possibilities, particularly in the rapidly evolving world of artificial intelligence (AI). As the sun shines bright over our financial landscape, the summer of 2024 presents an opportune moment to revisit and optimize your investment strategy, especially in AI stocks. This period is marked by transformative advancements in AI technology that are set to revolutionize multiple industries in the coming decades.
AI stocks recently experienced a notable correction in July, opening up tantalizing buying opportunities amidst a broader market rotation into sectors like homebuilders and banks. **Nvidia’s** CEO, Jensen Huang, has boldly referred to this era as the “next industrial revolution,” a statement that should resonate with savvy investors. According to Bloomberg Intelligence, the generative AI market is projected to grow at an impressive 42% compounded annual growth rate (CAGR) over the next ten years, spurring an investment cycle in AI training and inference across various sectors like education, gaming, and life sciences.
This article highlights three AI stocks that have emerged as front-runners in this high-stakes race: **Vertiv** ([VRT](https://themarketmonitors.com/stock/quote/VRT/)), **Nvidia** ([NVDA](https://themarketmonitors.com/stock/quote/NVDA/)), and **Broadcom** ([AVGO](https://themarketmonitors.com/stock/quote/AVGO/)).
Editor's Note: Analysis and insight for this article were originally sourced sourced from our friends at InvestorPlace
### 1) Vertiv (VRT): Driving AI Growth with Cutting-Edge Data Solutions
Vertiv’s AI Prowess
**Vertiv**, trading under the NYSE ticker **[VRT](https://themarketmonitors.com/stock/quote/VRT/)**, has established itself as a linchpin in the AI data center infrastructure sector. With 50 years of experience in selling end-to-end critical infrastructure for data centers, Vertiv’s comprehensive suite of solutions, ranging from thermal management to power management, positions it as an indispensable supplier for cloud service providers (CSPs) building AI data centers.
Investment Merits
Why should investors consider Vertiv? The company simplifies data center buildouts with its end-to-end solutions that include state-of-the-art thermal management solutions like liquid cooling technologies, and an extensive portfolio of power management products such as transformers, distribution units, busways, and microgrid integration capabilities. These offerings combined with its IT systems deliver a unified and integrated solution for CSPs navigating the complex AI landscape.
Despite a recent stock decline of over 15%, Vertiv’s second-quarter results underscored robust demand with a 57% rise in organic orders and a 14% increase in organic net sales. This quarter marked another beat and raise period for Vertiv, showcasing a significant operational efficiency reflected in its adjusted operating margins that expanded impressively to 19.6%. Consequently, the company raised its profit and free cash flow guidance for 2024, now expecting an adjusted EPS between $2.47 and $2.53. Trading at 31 times EPS, Vertiv’s valuation is appealing considering the AI growth tailwinds. Simply put, Vertiv’s solid fundamentals and market positioning make it a compelling investment.
Source: Casimiro PT / Shutterstock.com
Analyst Ratings for Vertiv (VRT)
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $295.45 |
| Potential Gain | 14.1% |
| Number of Ratings | 24 |
Summary of Analysts’ Outlook:
Analysts have a bullish outlook on Vertiv, with a consensus “Overweight” rating. The average price target of $295.45 suggests a potential gain of 14.1% from the current price. Analysts are likely driven by the company’s strategic position in the AI data center market and its strong operational efficiency.
Sources: Yahoo Finance, TipRanks, MarketWatch
### 2) Nvidia (NVDA): Dominating the AI Chip Market with Superior Tech
Nvidia’s Market Domination
**Nvidia**, listed on NASDAQ as **[NVDA](https://themarketmonitors.com/stock/quote/NVDA/)**, is synonymous with AI semiconductors, providing the innovative chips powering AI data centers globally. The company’s Hopper and Blackwell chips offer unparalleled performance, cementing its status as a leader in the transition to AI-focused data centers.
Investment Merits
Nvidia’s leadership in the AI chip market is undisputed. The Hopper and upcoming Blackwell chips stand out for their superior performance, offering a significant edge in the burgeoning field of AI data centers. Bank of America has shown unwavering confidence in Nvidia, maintaining a bullish stance with a $150 price target. Analyst Vivek Arya emphasized that generative AI deployments are in the second year of a potential 3–5-year investment cycle.
Nvidia also boasts an integrated approach, combining Grace CPUs, Blackwell GPUs, NVLink, Quantum, and Spectrum technologies, high-speed interconnects, and its CUDA ecosystem to provide a comprehensive solution for AI data centers. Recent share pullbacks from $140 to $113 have made NVDA an attractive buy. With a forward non-GAAP P/E ratio of 41, below its 5-year average of 47, Nvidia is poised for robust growth. The company is expected to grow revenues by 97% this fiscal year, clearly indicating its strong growth potential and making it a “must-watch” for investors.
Source: Tada Images / Shutterstock.com
Analyst Ratings for Nvidia (NVDA)
| Metric | Value |
|---|---|
| Consensus Rating | Overweight (Buy) |
| Average Price Target | $643.41 |
| Potential Gain | 24.1% |
| Number of Ratings | 34 |
Summary of Analysts’ Outlook:
Analysts are overwhelmingly bullish on Nvidia, with 24 out of 34 analysts rating the stock as “Buy” or “Overweight”. The average price target suggests a potential gain of 24.1% from the current price. Analysts are positive on Nvidia’s dominance in the graphics processing unit (GPU) market, its growing presence in artificial intelligence (AI) and autonomous vehicles, and its strong financial performance.
Sources: TipRanks, Yahoo Finance, MarketWatch
### 3) Broadcom (AVGO): Dominating Custom AI Chip Design for Tech Giants
Broadcom’s Customized Approach
**Broadcom**, trading under NASDAQ’s **[AVGO](https://themarketmonitors.com/stock/quote/AVGO/)**, is a crucial player in the AI semiconductor market, particularly in custom AI chips and AI networking infrastructure. The company’s specialized focus on custom AI chips sets it apart from the competition.
Investment Merits
Broadcom’s leadership in custom AI silicon is significant, with major companies like Google relying on its tensor processing units. The demand for custom chips is surging due to the complexity of large language models, and Broadcom is at the forefront, collaborating with tech giants such as Microsoft and Meta Platforms. In fact, Google stands as its largest customer for TPU production, demonstrating Broadcom’s pivotal role in the industry.
The company reported a staggering 280% year-over-year surge in AI revenues, reaching $3.1 billion, primarily driven by AI networking products. The combined demand for AI networking and custom accelerators is expected to account for over 30% of semiconductor revenues in FY2024, up from 10% in FY2022, showcasing rapid growth.
Broadcom’s acceleration in AI revenues positions it as a highly lucrative investment opportunity. The continuous demand for custom AI solutions and networking infrastructure underpins Broadcom’s strategic importance in the AI tech stack, making AVGO a prime candidate for your investment portfolio.
Source: Piotr Swat / Shutterstock.com
Analyst Ratings for Broadcom (AVGO)
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $625.44 |
| Potential Gain | 14.1% |
| Number of Ratings | 34 |
Summary of Analysts’ Outlook:
The consensus rating among analysts is Overweight, indicating a positive outlook for the stock. The average price target of $625.44 suggests a potential gain of 14.1% from the current price. Analysts are optimistic about Broadcom’s prospects, driven by its strong position in the semiconductor industry, diversified product portfolio, and growing demand for its products in the data center, cloud, and 5G markets.
Sources: Refinitiv, Bloomberg, Yahoo Finance, TipRanks
### The AI Revolution is Here
Investing in AI stocks like **Vertiv**, **Nvidia**, and **Broadcom** offers significant opportunities to capitalize on the ongoing AI revolution. These companies are strategically positioned within the AI technology stack and demonstrate robust growth prospects, making them compelling picks for investors looking to ride the wave of this transformative trend. The AI revolution is indeed here, and now is the perfect time to invest in the future.
Stay tuned to Market Monitors for more insights and updates on the ever-evolving world of investments!
