Artificial intelligence ( AI ) has been touted as the fourth industrial revolution. Given that the AI investment cycle is just beginning, these fastest-growing AI stocks to buy will outperform in the long run. The AI revolution has triggered a new race in the technology landscape. First, due to the shift from general-purpose to accelerated computing, there is an upgrade cycle in the data center. That means replacing Central Processing Units (CPUs) with Graphic Processing Units (GPUs) that support AI. Secondly, since these GPUs are processing massive amounts of data and doing massive computations, they must communicate. Thus, demand for networking equipment like Ethernet, PCI Express and optical interconnect has also soared. These fastest-growing AI stocks to buy are already seeing tremendous momentum. The bull case is straightforward: AI will drive massive productivity gains and increase global GDP. Therefore, companies and governments must invest in AI, which will directly benefit these stocks. Nvidia (NVDA) Since delivering the first AI supercomputer, the DGX-1, to OpenAI in 2016, Nvidia (NASDAQ: ) has been at the forefront of AI innovation. With the launch of ChatGPT, this semiconductor giant was thrust into the limelight. NVDA For generative AI to work, it requires massive computations in terms of trillions of flops per second. That’s where Nvidia comes in with its leading-edge graphic processing units, which support these computations. Furthermore, it has built an ecosystem of chips, systems, software and networking services to support accelerated computing. Recognizing the potential for AI, companies have started investing, starting with infrastructure. As a result, demand for Nvidia GPUs used in data centers has soared. Data center revenue has quadrupled from $3.6 billion in Q4 fiscal year 2023 to $18.4 billion in Q4 FY2024. Impressively, in the latest quarter, total revenues were up 22% quarter-over-quarter and 265% year-over-year. Nvidia continues to dominate AI GPUs and extended this leadership by launching its Blackwell platform. Furthermore, management expects significant growth from Nvidia Inference Microservices — a packaged service for various large language model tools. At 37 times forward earnings, NVDA stock is a bargain, considering the tremendous revenue growth ahead. Super Micro Computer (SMCI) This server manufacturer has emerged as a winner in the AI race. The advent of generative AI has triggered the replacement of traditional servers with AI-powered ones. As a result, demand for Super Micro Computer (NASDAQ: ) servers has soared. SMCI The company is a leader in manufacturing plug-and-play AI servers. It configures server racks installing AI chips from Nvidia and Advanced Micro Devices (NASDAQ: ). The company has partnerships with Nvidia and also provides GPU rack-scale solutions powered by the MI300. AMD Super Micro is seeing incredible revenue growth and is one of the fastest-growing AI stocks to buy. Notably, it has raised and beat guidance several times over the past year. For the quarter ended Dec. 31, 2023, it grew revenues by 103% YOY. What’s more, the company raised fiscal year 2024 guidance to a range of $14.3 billion to $14.7 billion from $10 billion to $11 billion. Bank of America (NYSE: ) forecasts a growing AI server market, with revenues growing from $39 billion to $200 billion by 2027. Analysts think Super Micro is well positioned due to its relationship with AI chip manufacturers, customizable options and liquid cooling offerings. Lastly, its building block architecture will enable it to incorporate the latest technology and deliver quickly to customers. BAC Broadcom (AVGO) Broadcom (NASDAQ: ) is also one of the fastest-growing AI stocks to buy. It is seeing tremendous growth as it enables AI in infrastructure. In this market, the company has two products. First, it offers custom AI accelerators for consumer platforms developing large-scale AI platforms. Second, it sells the network technology required to connect all these custom AI accelerators. AVGO The semiconductor giant has been seeing tremendous demand from consumer-facing AI customers. Alphabet (NASDAQ: , NASDAQ: GOOG ) and GOOGL Meta Platforms (NASDAQ: ) are the main customers for its application-specific integrated circuits products and complementary networking technology. META In Q1 FY2024, Broadcom reported networking revenue of $3.3 billion, representing 46% YOY growth. Due to the strength of AI demand, management raised the segment’s annual growth to 35% YOY from the prior 30%. They now expect AI revenues to represent more than 35% of semiconductor revenues and to exceed $10 billion. Furthermore, during the recent Enabling AI Infrastructure Investor Meeting, Broadcom announced a third consumer AI customer. It is in the ramp phase for this customer and expects to start shipping products in the next few months. Lastly, on March 20, the company announced its latest AI infrastructure innovations. These innovations extend Broadcom’s leadership in custom AI accelerators and networking segments like optical interconnect and Ethernet. On the date of publication, Charles Munyi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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