Artificial intelligence (AI) has been the driving force behind the stock market's biggest winners in recent years, and that trend looks far from finished. The opportunity ahead is still massive, so this is an area that most investors will want some exposure to.
Here are five top AI stocks to buy as September rolls on.
Image source: Getty Images
1. Nvidia
No company has benefited more from the buildout of AI infrastructure than Nvidia (NVDA 3.17%). Its graphics processing units (GPUs) remain the gold standard for powering the training of large language models (LLMs), and its popular CUDA software platform helped give it a moat that competitors have yet to crack. Meanwhile, its networking revenue is also soaring, with demand for its NVLink, InfiniBand, and Spectrum-X products leading to a 98% year-over-year surge in Q2 data center networking revenue to $7.3 billion.
While its Blackwell chips are already the leading hardware for providing processing power for training, Nvidia said that those GPUs also set the standard for inference, which could eventually become a much bigger market than training. With AI infrastructure projected to be a multitrillion-dollar market in the coming years, Nvidia has more than enough room to keep growing.
The stock has had a massive run, but the momentum behind AI spending means Nvidia remains a top pick for long-term investors.
2. Broadcom
Broadcom (AVGO 2.99%) has emerged as the go-to name for custom AI chips, which are becoming critical as hyperscalers (operators of massive data centers) look to lower their inference costs and reduce their reliance on Nvidia. Broadcom already counts Alphabet (GOOGL 2.01%) (GOOG 2.25%), Meta Platforms (META 2.11%), and ByteDance among its customers, and management projects that these relationships alone could be worth $60 billion to $90 billion by its fiscal 2027 (which ends October 2027).
NASDAQ: AVGO
Key Data Points
However, things got even better for shareholders after Broadcom revealed that a fourth customer, presumably OpenAI, had placed a massive $10 billion order for next year. The pace at which Broadcom is able to design custom AI chips appears to be accelerating, which bodes well for its growth, especially with Apple having been earlier revealed as a fifth major customer.
Throw in Broadcom's strong networking business and its VMware arm, which positions it as a software player in AI infrastructure, and this is a company with a lot of growth potential. Investors looking for diversified AI winners beyond Nvidia should have this stock near the top of their lists.
3. Advanced Micro Devices
The next battleground in the AI chip wars looks like it will be for inference. While Nvidia and Broadcom are both well positioned for this fight, don't count Advanced Micro Devices (AMD 1.94%) out. AMD has already been carving out a role in this space. Seven of the 10 biggest AI operators already use its GPUs, with one major AI company running a significant amount of inference on AMD chips.
NASDAQ: AMD
Key Data Points
AMD, along with Broadcom and others, also helped form the UALink Consortium to create an open-source interconnect standard. This could loosen the grip that Nvidia has established on that score with its NVLink offering, and allow companies to more easily mix and match AI chips from different vendors. That would be hugely beneficial for AMD.
On top of that, AMD's central processing units (CPUs) continue to gain traction in data centers. The revenue gap between Nvidia and AMD is still massive, which is why even modest market share gains in the GPU segment could drive AMD's numbers significantly higher. That opportunity makes the stock a compelling buy.
4. Alphabet
Alphabet just dodged what could have been a big problem when the judge in its antitrust case opted not to require it to sell its Chrome browser. That preserved one of the company's most important advantages in search: distribution. That foundation, with Chrome and Android, gives Google an advantage that will be difficult for AI upstarts to overcome.
The company is now layering AI on top of search. Its AI Overviews are already being used by more than 2 billion people each month, and it's rolling out AI Mode around the world in different languages. Meanwhile, its Gemini large-language models are among the best in the industry, and giving users the option to toggle between AI Mode and traditional search inside Google is another edge. Importantly, Alphabet knows how to monetize users, whether through traditional search or AI.
NASDAQ: GOOGL
Key Data Points
Beyond search, Google Cloud has been a powerful growth engine for Alphabet as companies rush to cloud computing providers to help build out their own AI models and apps and run them on cloud infrastructure. Meanwhile, its custom chips -- made with the help of Broadcom -- have given it a cost advantage. Add in other bets like its Waymo robotaxi business and its quantum computing efforts, and Alphabet is well-positioned for the future.
5. Meta Platforms
Meta Platforms has reinvented itself with AI, turning what many thought was a fading social media company into one of the best growth stories out there. Its Llama models are improving user experiences by serving up more engaging content, while advertisers get access to better targeting and ad campaign tools. That combination led to a 22% year-over-year jump in ad revenue last quarter, with both impressions and ad prices moving higher. Meta is also just starting to run ads on WhatsApp and Threads, opening up new growth avenues.
Yet CEO Mark Zuckerberg's ambitions go well beyond ads. He has talked openly about building "personal superintelligence" and has been recruiting aggressively to make it happen.
With its huge operating cash flow, Meta can afford to chase big opportunities in AI, and it already benefits from AI-driven gains in its core business. That makes Meta an AI stock to own.
