Artificial intelligence (AI) applications like OpenAI's ChatGPT seem to get all the attention. But it's the infrastructure -- the chips and cloud computing platforms -- upon which these apps are built that make AI possible. And the builders of this base layer of AI are making many of their shareholders rich.
If you'd like to claim your share of the AI gold rush, here are two top stocks to consider investing in today.
1. Oracle
Larry Ellison loves data -- so much so that he built his entire company around it nearly 50 years ago.
AI runs on data. Ellison knows this, and the billionaire co-founder, chief technology officer, and executive chairman of Oracle (ORCL +2.23%) has the database leader and burgeoning cloud infrastructure provider perfectly positioned to profit from the technological revolution.
NYSE: ORCL
Key Data Points
Oracle's cloud platform is smaller than that of its hyperscaler rivals Amazon, Microsoft, and Alphabet. But Oracle is growing much faster thanks to its database expertise and fruitful relationships with fast-growing businesses like OpenAI and TikTok.
Revenue rose 12% year over year to $15 billion in the quarter ended Aug. 31. The gains were driven by a 55% surge in cloud infrastructure revenue to $3.3 billion.
And that growth is set to accelerate rapidly. Its remaining performance obligations -- a strong indicator of future sales that represent customer commitments not yet recognized as revenue -- skyrocketed by 359% to $455 billion.
Roughly $300 billion of those future sales are expected to come from providing computing resources to OpenAI, the rapidly expanding AI pioneer. It has a nearly insatiable need for data centers with the computing capacity to train and run its large language models.
Oracle is also working to diversify its customer base by striking deals with other AI leaders, such as Meta Platforms and Elon Musk's xAI.
In turn, management sees revenue achieving a compound annual growth rate of 31% to $225 billion by fiscal 2030. Adjusted earnings are projected to grow by 28% annually to $21 per share over the next five years.
2. Taiwan Semiconductor Manufacturing
The boom in AI and cloud infrastructure is leading to soaring demand for advanced semiconductor chips. Taiwan Semiconductor Manufacturing (TSM 0.92%) is the leading supplier of foundry services to companies like Nvidia and Advanced Micro Devices. That means it builds the chips these AI leaders design, a lucrative business that's thriving.
NYSE: TSM
Key Data Points
TSMC, as the company is known, saw its foundry market share climb to 70% in the second quarter, according to TrendForce, a market intelligence and consulting company. Strong sales of smartphones, laptops, desktops, and graphics processing units (GPUs) used for AI applications drove TSMC's gains.
The chipmaker's revenue jumped 30% year over year to $33 billion in the third quarter. Scale efficiencies led TSMC's earnings per American depositary receipt (ADR) to rise by an even higher 39% to $2.92.
Robust sales of Apple's new iPhone 17 should propel TSMC's smartphone chip revenue higher in the coming quarters. At the same time, cloud infrastructure providers -- including TSMC customers Amazon, Microsoft, and Alphabet -- are planning to invest more than $520 billion in 2026 to expand their networks, with much of that spending expected to be on AI chips.
All told, TSMC's earnings have grown by 18% annually since becoming a public company in 1994. This remarkable operational and financial performance is likely to continue well into the coming decade, thanks to the chip leader's central place within the AI industry. That's the type of long-term, consistent growth that could help make you a millionaire.
