6 Artficial Intelligence (AI) Stocks Are Worth Over $1 Trillion. Here Are the 2 Most Likely to Join the Club Next.
Take a look at a list of the world's largest companies based on market cap, and you might notice a common thread for most of them: the largest members of the group have bet big on artificial intelligence (AI). These bets appear to be paying off.
Currently, six AI stocks are worth more than $1 trillion. They could have a company in the not too distant future. Here are the top six — and which AI stocks are likely to join the club next.
The six trillion dollar package
apple (Nasdaq: Apple) And Microsoft (NASDAQ:MSFT) In a close race to become the largest company in the world. Their market value ranges around $3.3 trillion.
For a while, it looked like Apple might be left in the dust in the race to develop artificial intelligence technology. Its Siri AI assistant looked almost old compared to new Large Language Models (LLMs).
However, Apple's recent launch of new generative AI capabilities has changed the narrative. Some believe that new Apple Intelligence features could lead to an iPhone upgrade super cycle.
Microsoft has benefited greatly from its relationship with ChatGPT creator OpenAI. The tech giant's cloud business has grown in particular thanks to huge AI tailwinds. The company's introduction of AI-powered Copilot+ computers should also provide a nice boost to sales of its operating system.
Nvidia (Nasdaq: NVDA) It surpasses Apple and Microsoft with a market value of about $3.2 trillion. maker Graphics processing units (GPUs) It has been the poster child of the AI boom over the past 18 months. Nvidia's upcoming introduction of its Blackwell GPU architecture could keep it at the top of the AI chip market.
We can say that Google is a parent the alphabet (NASDAQ:GOG) (Nasdaq: Google) And Amazon (Nasdaq: AMZN) They are in the second tier of Megacap AI stocks. Alphabet's market cap is about $2.2 trillion, while Amazon's market cap is just under $2 trillion.
Both companies, like Microsoft, are cloud service providers. Generative AI may be the most powerful driver of cloud growth to date. Both Alphabet and Amazon are using AI to drive revenue in their core non-cloud businesses (search Alphabet and Amazon e-commerce). They also hope to be winners in self-driving car technology – Alphabet with its Waymo unit and Amazon with Zoox.
Meta platforms (NASDAQ:META) It lags behind other AI leaders with a market capitalization approaching $1.3 trillion. The company uses AI extensively in its social media apps, including Facebook and Instagram. CEO Mark Zuckerberg predicted in late 2023 that AI-powered business messaging would be the “next major pillar” of its business.
Next in the club
Which AI companies are best positioned to join these six companies in the trillion-dollar club? My votes go to Broadcom (NASDAQ:AFGO) And Taiwan Semiconductor Manufacturing Co., Ltd (NYSE: TSM).
Broadcom's market cap is now approximately $780 billion. The stock rose last week after the semiconductor maker reported impressive results for the second quarter of fiscal 2024. Revenue jumped 43% year over year, primarily due to its acquisition of VMware and strong demand for its networking products in data centers. artificial intelligence.
The company also announced plans to conduct a 10-for-1 stock split on July 15. Although this split will not impact Broadcom's core business, it could make the stock more attractive to retail investors.
The Taiwan semiconductor manufacturing company's market cap of about $740 billion isn't too far behind Broadcom's. The company manufactures chips for many of the top AI leaders, including Apple, Nvidia, and Broadcom.
As its name indicates, the company is based in Taiwan. However, it expects to begin production at its first advanced chip manufacturing facility in Arizona next year. It is also building another impressive factory in that state, with plans for a third. These investments could strengthen the company's position as the chip maker of choice for the world's top AI companies.
Are Broadcom and Taiwan Semiconductor smart choices?
Although I expect Broadcom and Taiwan Semiconductor to be the next AI stocks with a market cap of $1 trillion or more, I don't know how long it will take them to reach that threshold. But I think both are smart stocks to buy now for strong growth investors.
Income and value investors may want to look elsewhere. There is no cheap stock. Although they both pay dividends, their yields are only 1.4% — not enough to entice many income investors.
If you're looking for growth, and don't mind potential volatility, Broadcom and Taiwan Semiconductor Manufacturing may be for you. I expect both stocks to continue to beat the market in the coming years as AI adoption increases.
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Susan Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Speights He holds positions at Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has Disclosure policy.
6 AI stocks worth more than $1 trillion. Here are the two people most likely to join the club next. Originally published by The Motley Fool
