What are the Top 3 Artificial Intelligence (AI) Stocks to Buy Now?

Nvidia remains the king of artificial intelligence (AI) infrastructure.
Broadcom has a big opportunity with its custom, application-specific chips.
With HBM demand on the rise, Micron is poised to be a huge AI infrastructure winner.
10 stocks we like better than Nvidia ›

The biggest driving force in the market continues to be artificial intelligence (AI), which is why now could be a great time to pick up shares of some of the best companies in the space. Let’s look at three AI stocks to buy now.

The AI infrastructure boom shows no signs of slowing down, as evidenced by Taiwan Semiconductor Manufacturing makes the decision to greatly increase its capital expenditures this year. Fabs (chip manufacturing facilities) need to be running close to full capacity to be profitable, so this was not a step taken lightly. The foundry (known as TSMC for short) needed evidence that the AI chip demand was not a passing fad, and was convinced that this demand is here to stay.

That’s great news for Nvidia (NASDAQ: NVDA)which is a big TSMC customer. Its graphics processing units (GPUs) are the primary chips used to run AI workloads, and its leading manufacturing partner has just indicated that demand for AI infrastructure is a long-term secular trend. With around 90% market share in the GPU space, Nvidia continues to be one of the companies best positioned to benefit from the continued construction of the AI data center.

Image source: Getty Images

While Nvidia’s dominance in AI infrastructure is undisputed, Broadcom (NASDAQ: AVGO) is also making great strides helping hyperscalers (owners of large data centers) make custom AI chips to handle some of their AI workloads. The company is a leader in ASICs (application specific integrated circuits), providing the building blocks to help customers’ designs become physical chips that can be manufactured at scale.

ASICs are pre-programmed chips that do not have the adaptability of GPUs, but they tend to perform strongly for the tasks they are designed for and are more energy efficient. This becomes increasingly important with AI inference, which is an ongoing cost.

Broadcom helped Alphabet develops its highly successful tensor processing units (TPUs), and is set to benefit from larger TPU deployments as Alphabet begins to let large customers order custom chips to be deployed via Google Cloud. Anthropic has already placed a $21 billion order with Broadcom for TPUs to be delivered this year.

Several other companies are working with Broadcom to design their own custom AI chips, including OpenAI. Citigroup analysts have projected that Broadcom’s AI revenue could increase fivefold in the next two years from just over $20 billion this past fiscal year to $100 billion. That’s huge since the company just recorded just under $64 billion in revenue for fiscal 2025.

For GPUs and AI ASICs to perform at their best, they need high bandwidth memory (HBM), a specialized form of dynamic random access memory (DRAM) that stores data and helps AI chips retrieve and transmit it quickly. Because AI model training and inference is all about speed, and HBM helps improve processing speeds, demand is through the roof. The shift to AI agents, where AI agents need to make real-time decisions, only makes HBM more important.

This is a great blessing to Micron Technology (name: mu)which is one of the three big DRAM makers along with Samsung and SK Hynix. HBM is much more complex to manufacture than regular DRAM and requires three to four times the wafer capacity. However, the economics of the unit is much better, which is leading these companies to focus production on HBM, causing a shortage of supply in the entire DRAM market.

This is causing the prices of memory and supplies to rise sharply which are sold out in advance. While Micron is working to increase HBM capacity, the supply and demand situation is likely to remain extremely favorable for quite some time, making it the best AI stock to own in the coming years.

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Citigroup is an advertising partner of Motley Fool Money. Geoffrey Seiler holds positions in Alphabet and Broadcom. The Motley Fool has positions in and recommends Alphabet, Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

What are the Top 3 Artificial Intelligence (AI) Stocks to Buy Now? was originally published by The Motley Fool

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