2 Best Artificial Intelligence (AI) Growth Stocks to Buy Now

By | April 14, 2024

Smart investors are looking for ways to safely profit from the artificial intelligence (AI) boom. The breakthrough technology is expected to deliver huge cost savings and productivity gains for organizations that embrace it. AI, in turn, could boost the global economy by as much as $15.7 trillion by the end of the decade, according to consultancy PwC.

Companies that help their customers harness the power of AI are likely to generate handsome rewards for their investors. Read on to learn about two technology leaders who are particularly well positioned to deliver AI-powered profits to their shareholders.

Advanced micro devices

Nvidia has been one of the biggest winners of the AI ​​boom, and for good reason. The semiconductor giant makes the lion’s share of the chips that power the most advanced AI applications. But demand for these advanced chips is so high that companies of all sizes are clamoring for more supply Advanced micro devices (NASDAQ: AMD) intends to provide this.

CEO Lisa Su sees a $400 billion opportunity by 2027 for so-called AI accelerators that help accelerate machine learning workloads in data centers. AMD wants to become a power player in this booming market. And it believes its powerful new chipsets will enable it to do so.

The company’s MI300 accelerators combine central processing units (CPUs), graphics processing units (GPUs) and high-bandwidth memory in an innovative, unified design. Companies like it Metaplatforms And Microsoft are intrigued by the potential performance and efficiency gains that AMD’s chips could bring to their cloud computing business. Major chip buyers would like to see more competition in the supply-constrained AI chip market, and they are likely to send a lot of business to AMD.

AMD also wants to usher in a new wave of AI-enabled personal computers (PCs). The chipmaker’s powerful Ryzen 8040 processors can run AI applications on laptops and other mobile devices more efficiently. Leading manufacturers of computer equipment such as Dell, Acer and Lenovo are starting to offer AMD’s new AI processors in their latest PCs. It’s just the beginning of what could be a huge trend. According to Canalys, by 2027, 60% of all PCs sold will be able to run accelerated AI applications.

Taiwanese semiconductor manufacturing

Someone has to actually assemble the chips that AMD, Nvidia and others design. This is the domain of the powerful Taiwanese semiconductor manufacturing (NYSE: TSM). The leading provider of semiconductor foundry services produces many of the most technologically advanced electronic components in the world.

In 2023, TSMC produced nearly 12,000 unique products using nearly 300 different technologies for more than 500 customers. Key customers include: Apple, IntelAnd Broadcomalong with a host of other major chip designers and buyers.

TSMC’s position at the top of the foundry market and its far-reaching impact on the global economy have resulted in steep rewards for its investors. The company has grown its revenue and profits at more than 17% annually over the past three decades and has made reliable cash payments to its shareholders since it started paying dividends in 2004.

You can expect this strong financial performance to continue. Governments are lobbying TSMC for billions of dollars in tax breaks to build new manufacturing sites to strengthen their supply chains and ensure increasingly important access to the latest chips. TSMC, in turn, plans to build factories in the US, Germany and Japan in the coming years.

Demand for AI chips is already driving the tech titan’s growth. TSMC’s net revenue rose 34% year-on-year to 195.2 billion new Taiwan dollars ($6.1 billion) in March.

Should You Invest $1,000 in Semiconductor Manufacturing in Taiwan Now?

Consider the following before buying shares in Taiwan Semiconductor Manufacturing:

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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Apple, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and Intel and recommends the following options: long January 2023 $57.50 calling on Intel, long January 2025 $45 calling on Intel, long January 2026 $395 calling on Microsoft, short January 2026 $405 calling on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

The 2 Best Artificial Intelligence (AI) Growth Stocks to Buy Right Now originally published by The Motley Fool

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