The artificial intelligence (AI) story shows no signs of cooling, creating big opportunities for top AI stocks to buy.
For one, according to Grand View Research, the global AI boom could grow from about $137 billion in 2022 to more than $1.81 trillion by 2030.
Two, companies like Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) have reportedly earmarked $40 billion for investments in AI-related and data center projects all over the world. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) says it will spend over $100 billion on AI development. Also, many are spending billions of dollars on AI startups to avoid falling behind the competition.
Next, with growing AI demand, data centers are seeing substantial demand.
There are projections that data center demand will double by 2030, thanks in great part to artificial intelligence. Further, Goldman Sachs is bullish on the industry. It estimates about 47 gigawatts (GW) of additional power generation capacity will be needed to accommodate growth.
All of that demand is creating incredible opportunities for AI stocks to buy if you have $5000 to invest.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is the pioneering force behind AI. It’s also one of the leading AI stocks to buy for the long haul.
Currently trading at just $124 following a 10:1 split, it’s a steal. And, with AI demand set to explode, NVDA could rally well above $1,000 a share again this time next year.
Moreover, Susquehanna analysts say NVDA could test $160 a share. Rosenblatt analysts say NVDA could rally to $200 with a buy rating. All of this is due to strong demand for its AI chips.
Earnings have been and should continue to be strong. In its most recent quarter, NVDA’s first quarter revenue jumped 262% year-over-year (YOY) to $26.04 billion.
That was well ahead of estimates for $24.65 billion. Adjusted earnings per share jumped 461% to $6.12, soaring above estimates for $5.50. Even adjusted gross margins of 78.9% were above expectations of 77.2%. Even guidance was expectedly strong.
For the second quarter, NVDA’s projected revenue of $28 billion is above expectations of $26.6 billion. Adjusted gross margins could come in around 75.5%, which is also above estimates for 75.2.%.
Digital Realty Trust (DLR)
The last time I highlighted an opportunity in Digital Realty Trust (NYSE:DLR), it traded at around $141. Shortly after hitting a high of $151.77, it’s now back to $151.75, where it’s still a strong buy.
First, yielding 3.28%, the real estate investment trust owns data centers around the world. All of which are seeing substantial demand with the AI boom. Also, according to Goldman Sachs, data center demand is expected to rise at a 15% CAGR between now and 2030. All could send Digital Realty Trust to higher highs.
Second, analysts at BMO Capital just upgraded DLR to outperform.
As noted by the firm, “We believe DLR remains well-positioned as a play on the AI-thematic, particularly within REITs, with room for further multiple expansion. Data center net absorption continues to set records (N. America leasing of ~4GW in 2023 and 5.5-6GW expected in 2024), supported by ongoing investments from hyper-scales as they develop their AI capabilities,” as quoted by Seeking Alpha.
ROBO Global Artificial Intelligence ETF (THNQ)
Or, if you’d rather diversify at a low cost of about $45 a share, there’s the ROBO Global Artificial Intelligence ETF (NYSEARCA:THNQ), which invests in companies leading the AI revolution.
THNQ includes companies developing the technology and infrastructure enabling AI. Those include computing, data and cloud services, as well as companies that apply AI in various verticals, from business processes to e-commerce and healthcare.
With an expense ratio of 0.75%, the THNQ ETF offers exposure to Nvidia, Microsoft, Palo Alto Networks (NASDAQ:PANW), Cloudflare (NYSE:NET), Analog Devices (NASDAQ:ADI), Rapid7 (NASDAQ:RPD) and 52 other holdings.
Over the last two years, we’ve watched the ETF rally from about $24 to $45.16. Moving forward, we hope to watch it nearly double again. All thanks to the artificial intelligence story, which shows no signs of slowing any time soon.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
