{"id":12197,"date":"2023-05-22T14:45:30","date_gmt":"2023-05-22T18:45:30","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/22-stocks-that-arent-nvidia-to-play-the-ai-boom\/"},"modified":"2023-05-22T14:45:31","modified_gmt":"2023-05-22T18:45:31","slug":"22-stocks-that-arent-nvidia-to-play-the-ai-boom","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=12197","title":{"rendered":"22 Stocks That Aren’t Nvidia to Play the AI Boom"},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

Wall Street is working overtime to dream up more ways to play the rapid emergence of artificial-intelligence software, which has become the new primary driver for tech stocks.<\/p>\n

\n Goldman Sachs
\n portfolio manager Brook Dane laid out his favorite AI picks over the weekend. Some were surprising choices such as the chip makers
\n Marvell Technology
\n (ticker: MRVL) and
\n Micron Technology
\n (MU), the cloud data warehouse company
\n Snowflake
\n (SNOW), and the security software giant
\n Palo Alto Networks
\n (PANW).<\/p>\n

\n

But there are many other theories on who the winners will be. On Monday, three Wall Street research firms weighed in on possible winners\u2014and losers\u2014from AI.<\/p>\n

The most comprehensive of these new reports, at 184 pages, comes from TD Cowen analyst John Blackledge. He writes that the generative-AI trend will be \u201ca monumental shift,\u201d on par with the adoption of the internet. Cowen is modeling $81 billion in generative AI software spend in 2027, a 190% 5-year compounded growth rate.\u00a0<\/p>\n

Cowen\u2019s top three AI plays are obvious ones:
\n Alphabet
\n (GOOGL),
\n Microsoft
\n (MSFT), and
\n Nvidia
\n (NVDA). Alphabet and Microsoft have a clear and early advantage in the AI software market\u2014and both have begun adopting AI features across their software portfolios, going far beyond search. And Nvidia is the clear leader in chips used to train large language models. All have surged higher this year. <\/p>\n

Blackledge adds other names to the list, though. <\/p>\n

\n Amazon
\n (AMZN), which is working on large language models of its own, provides a comprehensive set of AI tools to Amazon Web Services customers, and should benefit from the increase in demand for cloud-computing services that the expanded adoption of AI should trigger. And
\n Meta
\n (META) should be a beneficiary, as Facebook\u2019s parent ramps up spending on generative-AI software. In particular, the analyst thinks AI should boost the efficiency of Meta\u2019s advertising sales across the company\u2019s social networks.<\/p>\n

Blackledge also expects a boost for
\n Adobe
\n (ADBE), which is already showing off new generative-AI content creation tools.
\n Oracle\u2019s<\/span>
\n (ORCL) cloud-computing platform, he wrote, \u201chas some competitive advantages over the incumbents in capturing this next wave of cloud workload growth\u201d driven by AI and machine learning. Other picks include the chip makers
\n Advanced Micro Devices
\n (AMD) and Micron, the data center operators
\n Digital Realty Trust
\n (DLR) and
\n Equinix
\n (EQX), and security software stocks
\n CrowdStrike
\n (CRWD) and
\n SentinelOne
\n (S).<\/p>\n

Needham analyst N. Quinn Bolton offered up a diverse list of potential winners.<\/p>\n

Echoing a theme that Goldman\u2019s Dane pointed out last week on Barron\u2019s Live, the Needham note positions the chip industry as \u201cthe picks and shovels\u201d of AI computing. The trend should drive demand not only for Nvidia\u2019s GPUs, but also for sensors, memory, networking chips, and various other parts. <\/p>\n

Needham\u2019s list of winners includes not only Nvidia, which he considers \u201cthe best positioned company\u201d in AI, but also Micron,
\n Cerence
\n (CRNC), which makes voice-assist products used in cars; power management plays
\n Vicor
\n (VICR) and
\n Monolithic Power
\n (MPWR); and networking chip plays Marvell and
\n Credo Technology Group
\n (CRDO).<\/p>\n

Bolton is also bullish on
\n Taiwan Semiconductor
\n (TSM), \u201cthe only practical foundry\u2026to manufacture the most advanced chips such as AI accelerators.\u201d And he sees a boost to the electronic design automation tools sector, including
\n Cadence Design Systems
\n (CDNS) and
\n Synopsys
\n (SNPS).<\/p>\n

In the networking sector, Bolton calls out
\n Arista Networks
\n (ANET) as \u201cperhaps one of the primary beneficiaries of AI infrastructure builds.\u201d He thinks the company\u2019s strong position with the large cloud players \u201cgives them a clear advantage in this rapid growth arena.\u201d Needham estimates that AI, over time, will add 5% to 10% to Arista\u2019s long-term growth rate.<\/p>\n

Bolton is also bullish on
\n Cognex
\n (CGNX), \u201ca world leader in machine vision technology.\u201d He noted that the company has \u201cstepped up the deployment\u201d of deep learning-based technology across its product portfolio.<\/p>\n

JMP analyst Andrew Boone had thoughts, too, asserting that the technology will increase the \u201cwinner take most\u201d dynamics across the internet. For instance, he thinks the trend should be a boost to social media platforms. \u201cAI models accelerate the brainstorming process for creators, while editing tools are becoming more powerful and easier to use,\u201d Boone wrote. \u201cWe think this further democratizes the creative process, which should directly benefit social networks as long-tail content proliferates.\u201d<\/p>\n

One of Boone\u2019s conclusions is that the emergence of chatbots like Bard, Bing, and OpenAI is likely to \u201cnegatively impact the open web,\u201d with more searches answered by AI. His view is that the ability of AI-based chatbots to answer queries will reduce the number of times information seekers proceed to other websites. <\/p>\n

\u201cSimply put this increases the importance of app and direct traffic, or said differently, brand, while likely reducing the business opportunity for the long tail of the web,\u201d he wrote. In particular, Boone thinks the trend \u201cbodes poorly for the long tail of publishers.\u201d He sees potential risks to
\n Taboola
\n (TBLA) and
\n Outbrain
\n (OB), which among other things sell ads intended to drive traffic to content publishers\u2019 websites.<\/p>\n

Write to Eric J. Savitz at eric.savitz@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Wall Street is working overtime to dream up more ways to play the rapid emergence of artificial-intelligence software, which has become the new primary driver for tech stocks. Goldman Sachs portfolio manager Brook Dane laid out his favorite AI picks over the weekend. Some were surprising choices such as the chip makers Marvell Technology (ticker: […]<\/p>\n","protected":false},"author":1,"featured_media":12198,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-12197","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\n22 Stocks That Aren't Nvidia to Play the AI Boom | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Wall Street is working overtime to dream up more ways to play the rapid emergence of artificial-intelligence software, which has become the new primary\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=12197\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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