Free Trial

The 4 Horsemen of the Generative AI Revolution

NVIDIA stock chart

Key Points

  • The AI tide will lift a lot of ships, but the biggest players will have the most to gain. 
  • Established blue-chip tech has the money and means to advance and monetize the technology.
  • These four stocks are the leading players taking share and establishing themselves as pillars of the AI revolution. 
  • 5 stocks we like better than NVIDIA

Generative AI is here and in a big way. The rise of generative AI already impacts our daily lives and will only grow as the infrastructure is built, models are trained, and applications are developed. While numerous players in AI are positioned to benefit from the boom, the blue-chip mega-cap players will be the winners in the long term. These companies have the interest and inclination to advance the technology, money, networks, and scale to make it happen. More importantly, in the case of the four stocks on this list, their offerings are in demand by the industry, setting them up to gain share and retain leading positions long into the future. 

NVIDIA: The New N in FAANNG

NVIDIA Today

NVIDIA Co. stock logo
NVDANVDA 90-day performance
NVIDIA
$131.88
+2.27 (+1.75%)
(As of 06/14/2024 ET)
52-Week Range
$39.23
$132.84
Dividend Yield
0.03%
P/E Ratio
77.12
Price Target
$116.90

AI launched NVIDIA NASDAQ: NVDA into a new ball game. What was once a niche semiconductor company is now central to the evolution of technology. Its GPUs and accelerators commanded the data center market before the rise of AI and are now in such hot demand that the company is sustaining triple-digit growth on a YOY basis and outpacing expectations. 

The advantage for NVIDIA is two-fold: it has revolutionary semiconductor designs and leans into software. NVIDIA built the operating platform for its GPUs and accelerators from the start, giving it a lead over competitors racing to catch up. The result is NVIDIA’s full-stack approach to AI, which includes the chips to power it, the infrastructure to deliver it, and its services. The takeaway is that this niche company is now counted among the leading tech and Internet companies, including Microsoft, Google, and Amazon, and is considered a new "N" for FAANG, which refers to Facebook, Apple, Amazon, Netflix, and Google.

NVIDIA stock chart

Micron: Providing Memory for AI

Micron Technology Today

Micron Technology, Inc. stock logo
MUMU 90-day performance
Micron Technology
$141.36
-1.78 (-1.24%)
(As of 06/14/2024 ET)
52-Week Range
$60.50
$144.22
Dividend Yield
0.33%
Price Target
$130.16

Micron NASDAQ: MU has emerged as an AI play because of memory. AI requires a lot of memory, and the newer HBM configurations work the best. Micron’s HBM3E (the latest version) is superior. Micron’s chips provide equal or superior performance with lower power consumption and less heat, making them a top choice for data center construction. Business should be solid for years because data center growth is accelerating, and a global AI-driven upgrade cycle is in play.

The company’s latest results underscore the strength of its position with end-markets normalized, and growth accelerated to nearly 60%. Growth is expected to continue at a robust double-digit pace through the end of the next fiscal year. There is some concern about patent lawsuits relating to Netlist, but they are unlikely to impact the business significantly. At least one of the underlying patents has been invalidated, and the other is under review. 

Micron stock chart

Microsoft: Moved to the Cloud at Just the Right Time

Microsoft Today

Microsoft Co. stock logo
MSFTMSFT 90-day performance
Microsoft
$442.57
+0.99 (+0.22%)
(As of 06/14/2024 ET)
52-Week Range
$309.45
$443.40
Dividend Yield
0.68%
P/E Ratio
38.32
Price Target
$465.83

Microsoft’s NASDAQ: MSFT move into the cloud was timely as it set the business up to gain share with the rise of AI. Today, Microsoft’s Azure Cloud is growing across operating segments and taking market share due to its scale, utility for business (including AI training and inference), and embedding of AI services. The company commands 25% of the global data center market share and is growing, taking share from leader Amazon NASDAQ: AMZN

A full stack of AI services, including Copilot, was launched across the system early in 2024 and resonates with users. The launch reaccelerated segment growth to over 30%, doubling the growth at Amazon’s AWS, outpacing analysts' estimates, and led to increased guidance. The company's guidance is likely cautious due to market demand and spending plans, including doubling the growth of new data centers. 

Microsoft stock chart

Oracle: Data is at the Heart of Everything AI

Oracle Today

Oracle Co. stock logo
ORCLORCL 90-day performance
Oracle
$138.13
-1.72 (-1.23%)
(As of 06/14/2024 ET)
52-Week Range
$99.26
$142.40
Dividend Yield
1.16%
P/E Ratio
37.23
Price Target
$141.50

AI is all about data—the Big Data generated by the Internet and mining that data for knowledge. Oracle NYSE: ORCL is central to the AI revolution because of its ubiquitous database service and lean into the cloud. Like Microsoft, Oracle effected a business transition from products to subscription services based in the cloud. Today, it is a leading database and developer solutions provider across cloud instances, including its own and Microsoft’s Azure. Highlights from the first half of calendar 2024 include ramping demand for AI services, ramping development of Gen2 data centers to meet the demand, and expanding partnerships with major AI players such as NVIDIA, Microsoft, and Amazon. 

Oracle stock chart

→ $16T Crypto Plot From Elon Musk (From Crypto 101 Media) (Ad)

Should you invest $1,000 in NVIDIA right now?

Before you consider NVIDIA, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list.

While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

7 AI Stocks to Invest In: An Introduction to AI Investing For Self-Directed Investors Cover

As the AI market heats up, investors who have a vision for artificial intelligence have the potential to see real returns. Learn about the industry as a whole as well as seven companies that are getting work done with the power of AI.

Get This Free Report
Thomas Hughes
About The Author

Thomas Hughes

Contributing Author

Technical and Fundamental Analysis

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Microsoft (MSFT)
4.6184 of 5 stars
$442.57+0.2%0.68%38.32Moderate Buy$465.83
Oracle (ORCL)
4.8348 of 5 stars
$138.13-1.2%1.16%37.23Moderate Buy$141.50
Micron Technology (MU)
3.8073 of 5 stars
$141.36-1.2%0.33%-40.97Moderate Buy$130.16
NVIDIA (NVDA)
4.5775 of 5 stars
$131.88+1.8%0.03%77.12Moderate Buy$116.90
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Recent Videos

Will FOMC Push Stocks Higher? Here’s What to Expect
Unlock Growth: Understanding Dividend Yield
Palantir Stock Excluded from S&P 500: Still a Buy?

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines