Key Points
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Nvidia, AMD, Broadcom, Micron, and TSMC are all set to be huge beneficiaries of the continued AI infrastructure build-out.
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Alphabet and Meta Platforms have both done a great job of applying AI to their core businesses to drive growth.
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ServiceNow stock has been caught in the SaaS sell-off, but it is well positioned to drive growth with AI offerings.
- 10 stocks we like better than Nvidia ›
If I were looking to start a portfolio of tech stocks beginning today, I’d probably focus my initial investments on market leaders that have strong growth runways. With that in mind, let’s look at eight artificial intelligence (AI) stocks that can form the basis of a great tech portfolio.
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1. Nvidia
If you’re starting a tech portfolio from scratch, it’s hard not to start with Nvidia (NASDAQ: NVDA). The company is the most dominant player in AI infrastructure, and its “acquisition” of Groq and its language processing (LPUs), along with its introduction of NemoClaw, set the company up well as the AI market begins to level off on startups and pivots toward inference and agentic AI. With spending on data infrastructure booming, it remains a top stock to own.
2. Advanced Micro Devices
It’s the No. 2 player to Nvidia in the graphics processing units (GPUs) market (which is a reason to invest on its own), but the big reason to own Advanced Micro Devices (NASDAQ: AMD) here is the company’s position as the leader in the data center central processing unit (CPU) market. CPUs act as the brain of a computer, and demand looks poised to explode higher with the rise of agentic AI. The company should also see its GPU revenue climb following deals with Meta Platforms (NASDAQ: META) and OpenAI.
3. Broadcom
More and more hyperscalers are looking to supplement GPUs with custom AI chips, which is a big catalyst for Broadcom (NASDAQ: AVGO). The company is the leader in ASIC (application-specific integrated circuit) technology and helped Alphabet (NASDAQ: GOOG) (NASDAQ: GOOG) develop its tensor processing units (TPUs). With additional ASIC customers in tow, it is set to see its custom chip revenue skyrocket in the coming years. This also helps feed into its data center networking business, which is also growing briskly.
4. Micron Technology
GPUs and AI ASICs both need to be packaged with high bandwidth memory (HBM) for optimal performance, and Micron Technology (NASDAQ: MU) is one of the big three makers of this type of memory. The stock is dirt cheap, given the historically boom-bust cycles of the memory market, but with AI, it looks like it may now have a strong secular growth driver behind it. Micron is already starting to sign long-term contracts, which should help give it much better visibility moving forward. This sets the company up for both continued strong growth and valuation multiple expansion.
5. Taiwan Semiconductor Manufacturing
With a virtual monopoly on advanced chip manufacturing, Taiwan Semiconductor Manufacturing (NYSE: TSM) is a must-own for the AI infrastructure boom. Whether it’s GPUs, advanced CPUs, or custom AI ASICs, companies need to hire TSMC to be able to manufacture these chips at scale if they want high yields (few defective chips). The company is expanding to meet surging demand, while it also has strong pricing power.
6. Alphabet
Alphabet is the internet search leader, but it’s become much more than that. It also operates one of the largest cloud computing businesses in the world, and its TPUs help give it a cost advantage with both training AI models and inference. As more customers begin deploying TPUs for their own usage, this adds another revenue stream for the company. At the same time, it is using AI with search to both fuel queries and drive revenue growth. With the most complete AI stack, Alphabet is very well positioned for the future.
7. Meta Platforms
Few companies have been as good at applying AI to driving growth in their core businesses as Meta Platforms. The social media and digital advertising giant is using AI to both keep users on its platform longer and to help advertisers better reach and convert potential customers. This is leading to both more ad impressions and higher ad prices. Meanwhile, the better Meta’s recommendation engine and ad tools get, the more it helps drive revenue growth.
8. ServiceNow
While its stock has been caught in the software-as-a-service (SaaS) sell-off, ServiceNow (NYSE: NOW) is an integral part of its customers’ data and workflow, and an important system of record. The company is producing strong 20%-plus growth, and its NowAssist generative AI suite is growing rapidly. Meanwhile, it has a big future growth opportunity with the introduction of its agentic AI orchestration platform AI Control Tower.
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Geoffrey Seiler has positions in Advanced Micro Devices, Alphabet, Broadcom, Meta Platforms, and ServiceNow. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Meta Platforms, Micron Technology, Nvidia, ServiceNow, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
