The first-quarter earnings season is starting to warm up, and two big international artificial intelligence (AI) companies just set the tone when they reported earnings last week. Dutch semiconductor equipment maker ASML and foundry Taiwan Semiconductor Manufacturing painted a picture of robust AI infrastructure demand that shows no signs of slowing. This bodes well for a bevy of Nasdaq-traded AI stocks that will report earnings later.
While even strong results may not guarantee a pop in their stocks, as seen with ASML and TSMC, let's look at three more AI stocks that seem like good buys right now.
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Nvidia: Strong growth ahead
All signs point to Nvidia (NVDA +1.30%) delivering another quarter of strong results and upbeat guidance when it reports its fiscal Q1 results toward the end of earnings season. Hyperscalers are spending an obscene amount on data center capital expenditures (capex) this year, and TSMC said that it was seeing strong signals from customers, of which Nvidia is its biggest. The foundry added that right now, the biggest issue is resource constraints as demand continues to outpace supply.
NASDAQ: NVDA
Key Data Points
That all bodes well for Nvidia, whose graphics processing units (GPUs) are the main chips used to power AI workloads. The company guided its fiscal Q1 revenue to climb 77% year over year to $78 billion, and based on recent history, that number is likely to be closer to $80 billion. Meanwhile, Nvidia has positioned itself well for the long term, as it has transformed itself from just a chipmaker into a company that can deliver end-to-end rack solutions for specific AI tasks.
Micron: Another huge quarter in the works
Micron Technologies (MU +0.90%) turned in one of the best earnings reports you'll see when it reported its fiscal Q2 results last month. It will likely be more of the same when the memory company reports its results this earnings cycle.
NASDAQ: MU
Key Data Points
Prices for both DRAM (dynamic random access memory) and NAND (flash) memory have skyrocketed over the past year, as the memory industry faces severe supply constraints. Micron gets nearly 80% of its revenue from DRAM and the rest from NAND. According to a report by South Korean publication ETNews, rival Samsung doubled its DRAM pricing in calendar Q1 and then increased it by another 30% in Q2.
This all points to another blowout quarter of huge revenue growth and expanding gross margins. Meanwhile, with GPUs and other AI chips needing to be packaged with high bandwidth memory (HBM) to optimize performance, the demand outlook for DRAM is likely to remain very favorable well into the future, even as more supply comes into the market. However, Micron's stock is likely to benefit most if the company can lock in more long-term HBM commitments, which could help reduce the cyclical nature of its business and lead to some multiple expansion.
AMD: Ready to benefit from GPU and CPU supply constraints
With demand for both GPUs and central processing units (CPUs) outstripping supply, this should set up Advanced Micro Devices (AMD +3.42%) to report a strong quarter when it announces its Q1 results early next month (May 5). Right now, hyperscalers are scrambling to get their hands on AI chips, which bodes well for the company even though it is the distant No. 2 player in the GPU market behind Nvidia. Meanwhile, the company should see a strong second-half surge in revenue due to the introduction of its new MI450 GPU and commitments from both Meta Platforms and OpenAI for the chips.
NASDAQ: AMD
Key Data Points
At the same time, with the rise of agentic AI, data center CPUs are now in short supply as demand surges. AMD reportedly raised prices last month, and this should be a strong tailwind for the company in the years ahead. Between its GPU and CPU opportunities and its ability to now offer full servers dedicated to tasks like inference and agentic AI, this is a stock to own heading into the next earnings report and beyond.
