Here’s how you can benefit from AI.
Artificial intelligence (AI) applications, such as OpenAI’s ChatGPT, seem to be getting all the attention. But it’s the infrastructure – the chips and cloud computing platforms – on which these apps are built that makes AI possible. And the builders of this base layer of AI are making many of their shareholders rich.
If you want to claim your share of the AI gold rush, here are two top stocks to consider investing in today.
1. Oracle
Larry Ellison loves data so much that he built his entire company around it almost fifty years ago.
AI runs on data. Ellison knows this, and the billionaire co-founder, chief technology officer and executive chairman of Oracle (ORCL +2.21%) has perfectly positioned the database leader and fast-growing cloud infrastructure provider to benefit from the technology revolution.
Today’s change
(2.21%)$5.67
Current price
$262.56
Key data points
Market capitalization
$749 billion
Day range
$256.80 -$265.80
Range of 52 weeks
$118.86 -$345.72
Volume
810K
Avg. full
23M
Gross margin
66.10%
Dividend yield
0.01%
Oracle’s cloud platform is smaller than that of its hyperscaler rivals Amazon, MicrosoftAnd Alphabet. But Oracle is growing much faster thanks to its database expertise and fruitful relationships with fast-growing companies like OpenAI and TikTok.
Revenue rose 12% year over year to $15 billion in the quarter ended August 31. The gain was driven by a 55% increase in cloud infrastructure revenue to $3.3 billion.
And that growth will accelerate quickly. Residual performance obligations – a strong indicator of future sales that represent customer obligations not yet recognized as revenue – shot up 359% to $455 billion.
About $300 billion of that future revenue is expected to come from providing computing resources to OpenAI, the fast-growing AI pioneer. It has a virtually insatiable need for data centers with the computing capacity to train and run its large language models.
Oracle is also working to diversify its customer base by striking deals with other AI leaders such as Metaplatforms and xAI by Elon Musk.
In turn, management expects revenue to reach a compound annual growth rate of 31% to $225 billion by fiscal 2030. Adjusted earnings are expected to grow 28% annually to $21 per share over the next five years.
2. Semiconductor manufacturing in Taiwan
The boom in AI and cloud infrastructure is driving demand for advanced semiconductor chips. Taiwanese semiconductor manufacturing (TSM 0.90%) is the leading provider of foundry services to companies such as Nvidia And Advanced micro devices. That means it builds the chips that these AI leaders design, a lucrative business that is flourishing.
Taiwanese semiconductor manufacturing
Today’s change
(-0.90%)$-2.72
Current price
$300.50
Key data points
Market capitalization
$1.558 billion
Day range
$296.68 -$307.63
Range of 52 weeks
$134.25 -$311.37
Volume
560K
Avg. full
12M
Gross margin
58.06%
Dividend yield
0.01%
TSMC, as the company is known, saw its foundry market share rise to 70% in the second quarter, according to TrendForce, a market intelligence and consulting firm. Strong sales of smartphones, laptops, desktops and graphics processing units (GPUs) used for AI applications drove TSMC’s gains.
The chipmaker’s revenue rose 30% year over year to $33 billion in the third quarter. Efficiency of scale boosted TSMC’s earnings per American Depositary Receipt (ADR) by an additional 39% to $2.92.
Robust sales of AppleTSMC’s new iPhone 17 should increase TSMC’s smartphone chip revenue in the coming quarters. At the same time, cloud infrastructure providers – including TSMC customers Amazon, Microsoft and Alphabet – plan to invest more than $520 billion to expand their networks by 2026, with much of that spending expected to be in AI chips.
All told, TSMC’s revenues have grown 18% annually since it became a publicly traded company in 1994. This remarkable operational and financial performance is likely to continue well into the next decade, thanks to the chip leader’s central position within the AI industry. That’s the kind of long-term, consistent growth that can make you a millionaire.
Joe Tenebruso has positions at Amazon. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
