Technology stocks have roared higher in recent years, buoyed by investor interest in artificial intelligence (AI). Since AI could be a game changer, investors aim to get in on key players early in their growth story.
Wall Street loves three in particular, with an overwhelming number of buy recommendations and forecasts calling for more gains in these stocks. Let's check them out.
Image source: Nvidia.
1. Nvidia
Nvidia (NVDA +0.03%) is the key player in the AI boom. That's because the company designs the most powerful AI chips around -- these drive unavoidable AI tasks like the training of models that will go on to solve complex problems. On top of this, Nvidia has developed a complete portfolio of AI products and services, and all of this has led to soaring earnings -- for example, Nvidia's revenue and net income surged in the triple-digits in the latest full year to more than $130 billion and $72 billion, respectively.
NASDAQ: NVDA
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Although Nvidia stock has climbed 1,200% over the past three years, Wall Street is optimistic about more growth ahead. Analysts' average forecast calls for a 22% gain over the coming 12 months.
2. Alphabet
Alphabet (GOOG 1.94%) (GOOGL 2.00%) offers AI customers something they greatly need now, and that's access to more and more compute. This is through the company's Google Cloud unit, which has seen tremendous growth in recent quarters. In the latest three-month period, Google Cloud's revenue rose 34% to $15 billion thanks to demand from AI customers.
NASDAQ: GOOGL
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Alphabet also has developed its own large language model, a tool that's powered much progress across its business -- for example, it's boosted the capabilities of Alphabet's Google Search and improved the advertising experience for advertisers. This is key since advertising drives the company's overall revenue.
Today, Wall Street expects gains of about 8% for Alphabet shares over the coming year.
3. Amazon
Amazon (AMZN +0.64%), like Alphabet, operates in the cloud computing business. The company's Amazon Web Services (AWS) is actually the world's largest cloud service provider, and that positions it well to gain AI customers. AWS has seen tremendous growth in its AI business, and in the recent quarter the cloud unit attained a $132 billion annualized revenue run rate.
NASDAQ: AMZN
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And like Alphabet, Amazon itself also is benefiting from its presence in AI. The company is using the technology to gain in efficiency across its e-commerce business and help customers do their shopping. All of this has been lifting earnings in recent quarters and is likely to continue favoring higher profitability.
Wall Street forecasts a 20% increase for Amazon stock over the next 12 months, suggesting now could be a great time to get in on this e-commerce and tech player.
