5 Best Artificial Intelligence Stocks to Buy in July

Record data center spending has been announced, and all the major companies are ing through with their plans, with some even expanding them

This bodes well for many players in the space and makes multiple companies excellent investments right now

I've identified five companies that appear to be excellent buys in the AI arena, which I can categorize into two main areas: infrastructure and cloud computing

Both are well positioned to benefit from the massive demand for AI right now, a key part of my investment criteria

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Their ducts are currently being used to facilitate AI training and inference, and are key beneficiaries of massive AI spending

Nvidia needs no introduction, as its graphics cessing units (GPUs) have powered the AI revolution from the start

There's no true competition in this space; only alternatives exist to prevent Nvidia from achieving outright market dominance

This bodes well for the future, as larger and larger data centers are being announced with Nvidia GPUs filling them

One area where Broadcom may be able to displace Nvidia's GPUs is with its custom AI accelerators, which Broadcom refers to as XPUs

XPUs can be configured to outperform GPUs when the workload they are fed is perly set up

By optimizing an XPU for a particular workload, Broadcom and its AI hyperscaler partners can create a more cost-effective and powerful computing device, albeit at the expense of flexibility

AI hyperscalers are increasingly utilizing more XPUs to train and run inference for AI models, but Nvidia GPUs remain at the center of many data centers due to their flexibility

There is plenty of room for both in the AI arms race, and each has a bright future ahead

Both Broadcom and Nvidia utilize Taiwan Semiconductor (TSMC) chips in their devices

This should come as no surprise, as TSMC offers clients the most advanced chip nology alongside excellent yields

As the demand for AI chips grows, that demand will trickle down to TSMC

There is huge demand for AI hardware, and these three companies are well positioned to capitalize on it

But so are a few cloud computing viders

Many companies may have AI aspirations, but they ly lack the resources to build a state-of-the-art AI training facility

Furthermore, they may not have a use case that requires running it all the time, which is necessary to justify the cost

Instead, companies can opt to rent computing power from cloud computing viders Amazon Web Services (AWS) or Google Cloud

Furthermore, many companies are shifting non-AI workloads to the cloud and powering them with GPUs from viders Nvidia

This demand is boosting the entire ecosystem, making stocks Alphabet and Amazon excellent buys

That's huge growth that every investor wants a piece of, and owning Amazon and Alphabet is a great way to capitalize on this trend

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors

Keithen Drury has positions in Alphabet, Amazon, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing

The Motley Fool has positions in and recommends Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing

The Motley Fool recommends Broadcom

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