Broadcom And 2 Other AI Stocks To Own

The Federal Reserve’s latest rate hike has made money more expensive just as companies pour capital into AI data centers and cloud infrastructure. Higher borrowing costs can punish crowded trades, while leaving some AI related stocks overlooked or mispriced. That is where this group of attractively valued AI enablers comes in. This article highlights three stocks from that list that tie directly into the ChatGPT and AI build out.

The three stocks highlighted below are only a sample of the opportunity set, with the full screen surfacing 131 more companies directly tied to the ChatGPT and AI build out that carry similarly compelling stories not covered here. To go deeper on this theme, head straight into the Undervalued Artificial Intelligence/ AI Stocks screener to identify, compare, and analyze the highest conviction ideas for your watchlist.

Broadcom (AVGO)

Broadcom is a key plumbing supplier for the AI build out, with its high speed networking chips and private cloud software helping move and manage the huge volumes of data that large language models such as ChatGPT rely on.

Broadcom generates about US$59.4b from Semiconductor Solutions and US$29.7b from Infrastructure Software. This reflects a business that goes well beyond AI while still being tightly linked to data center demand, and the group is valued at roughly US$1.7t by the market.

"Broadcom is generating substantial free cash flow, expanding its custom silicon business, strengthening its position in networking, and integrating software assets that further diversify earnings."

What happens if one unseen pressure on AI infrastructure demand, sitting just beneath those headline wins, starts to shift?

If that underappreciated pressure becomes the real swing factor, the full narrative for Broadcom unpacks where Broadcom’s AI momentum could accelerate or quietly stall next.

Oracle (ORCL)

Oracle is best known for its databases and business software. Its OCI Gen AI Service, Autonomous Database and AI infused Fusion apps now connect that expertise directly to the ChatGPT and enterprise AI build out.

Oracle generates about US$62.8b from cloud and software, US$5.8b from services and US$3.2b from hardware, and the group is valued at roughly US$446.3b by the market.

"This partnership positioned OCI as a key extension of the Microsoft Azure AI platform. The biggest impediment to growth is turning demand into revenue by delivering capacity faster and faster."

One question for investors is what happens if an unseen bottleneck in that AI build out, buried inside all those cloud contracts, starts to significantly affect margins.

If that pressure point is what really moves OCI, the full narrative for Oracle shows how Oracle’s AI demand could accelerate while bottlenecks quietly shift in the background.

Alphabet (GOOGL)

Alphabet powers much of the internet through Search, YouTube and Android, yet its Google Cloud unit, with Vertex AI and Gemini, is the clearest link to this AI infrastructure theme, contributing about US$77.6b of revenue alongside roughly US$367.1b from Google Services and a market value near US$4.25t.

Alphabet gives you a rare mix in this screener theme. There is a global ad and platform giant on one side, and a fast scaling AI and cloud engine on the other, all built on the same data and compute backbone.

"Google Cloud has gone from “meh” to money-maker. • Now #3 globally behind AWS and Azure, with over 11% market share."

What happens to Alphabet’s earnings power if a single hidden swing factor in that AI infrastructure build subtly shifts the balance between demand and returns?

That quiet swing factor is exactly what the full narrative for Alphabet unpacks, showing where Alphabet’s AI engine could decouple, accelerate, or stall next.

Seeking Alternatives Before Momentum Flies

Fresh ideas move first. By the time every headline catches on, the cleanest entry points can be gone. Scan these under the radar lists before momentum is fully caught, and consider acting earlier in your research process.

• Focus on reliable cash generators with strong balance sheets using the curated list of solid balance sheet and fundamentals (23 results), before broader attention potentially shifts toward quality and narrows simple entry points.
• Look for cash flowing AI companies via the hand picked 38 profitable AI stocks that aren't just burning cash, while expectations remain measured and prices may not yet fully reflect the narrative.
• Explore developments around potential changes in the power sector by reviewing the focused 39 power grid technology and infrastructure stocks, while grid technology and infrastructure stocks may still receive relatively limited attention.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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