Most people who are faced with making a big decision want to know their options first. But when there are many options, the decision-making process can still be overwhelming.
I suspect some investors could have this feeling in choosing which artificial intelligence (AI) stocks to buy. While there are lots of good alternatives, I think a few rise to the top. Here are three magnificent AI stocks to buy in June.
1. Nvidia
The adjective “magnificent” definitely applies to Nvidia (NASDAQ: NVDA). Shares of the graphics processing unit (GPU) maker have skyrocketed roughly 180% over the last 12 months and have delivered a jaw-dropping gain of more than 24x over the last 10 years. Nvidia is the fastest-rising member by far of the so-called “Magnificent Seven” stocks.
However, what Nvidia has done in the past isn’t as important as what it could do in the future. The company’s amazing growth story isn’t going to end anytime soon. Tech companies continue to buy Nvidia’s AI chips as fast as they can get their hands on them.
Nvidia plans to launch its new Blackwell GPU platform later this year. Blackwell will be the most powerful AI architecture ever. Unsurprisingly, the demand for Blackwell already outstrips the anticipated supply.
Yes, Nvidia trades at a nosebleed price-to-earnings ratio of nearly 65. I’ve been leery of the stock’s valuation at times, but growth puts high earnings multiples into a different context. And Nvidia is poised to continue delivering stunningly strong growth.
2. Amazon
Amazon (NASDAQ: AMZN) is another Magnificent Seven stock that’s been a big winner, thanks in part to its AI initiatives. Its shares have soared around 45% over the last 12 months, and Amazon has also been an 11-bagger over the last decade.
I expect Amazon Web Services (AWS) will be one of the biggest beneficiaries of the generative AI explosion. It’s already the biggest cloud services provider. In my view, AWS’ approach of making multiple large language models (LLMs) and AI tools available to its customers is a smart strategy. While AWS is a major customer for Nvidia (and will be among the…
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