2 Top Artificial Intelligence (AI) Growth Stocks to Buy Now

Savvy investors are on the hunt for ways to safely cash in on the artificial intelligence (AI) boom. The game-changing technology is expected to bring enormous cost-savings and productivity gains to organizations that embrace it. AI, in turn, could boost the global economy by a whopping $15.7 trillion by the end of the decade, according to consulting firm PwC.

Companies that help their customers harness the power of AI are likely to generate handsome rewards for their investors. Read on to learn about two tech leaders that are particularly well-positioned to deliver AI-fueled profits to their shareholders.

Advanced Micro Devices

Nvidia has been one of the biggest winners of the AI boom, and rightfully so. The semiconductor giant makes the lion’s share of the chips that power the most advanced AI applications. But demand for these cutting-edge chips is so high that companies of all sizes are clamoring for more supply — and Advanced Micro Devices (AMD -4.24%) intends to provide it.

CEO Lisa Su sees a $400 billion opportunity by 2027 for so-called AI accelerators that help to quicken machine learning workloads in data centers. AMD wants to become a power player in this booming market. And it believes its powerful new chipsets will enable it to do so.

The company’s MI300 accelerators combine central processing units (CPUs), graphics processing units (GPUs), and high-bandwidth memory in an innovative, unified design. Companies like Meta Platforms and Microsoft are intrigued by the potential performance and efficiency gains AMD’s chips could provide in their cloud computing operations. Major chip buyers would love to see more competition in the supply-constrained AI chip market, and they’re likely to send a large amount of business AMD’s way.

AMD also wants to usher in a new wave of AI-enabled personal computers (PCs). The chipmaker’s high-performance Ryzen 8040 processors can run AI applications on laptops and other mobile devices more efficiently. Leading computer equipment manufacturers like Dell, Acer, and Lenovo are beginning to offer AMD’s new AI processors in their latest PCs. It’s just the start of what could be a massive trend. By 2027, 60% of all PCs shipped will be capable of running accelerated AI applications, according to Canalys.

Taiwan Semiconductor Manufacturing

Someone has to actually assemble the chips that AMD, Nvidia, and others design. This is the domain of the mighty Taiwan Semiconductor Manufacturing (TSM -3.18%). The leading provider of semiconductor foundry services produces a huge swath of the world’s most technologically advanced electronic components.

In 2023, TSMC manufactured nearly 12,000 unique products using almost 300 different technologies for over 500 clients. Key customers include Apple, Intel, and Broadcom, along with a host of other major chip designers and buyers.

TSMC’s place atop the foundry market and far-ranging impact on the global economy has resulted in steep rewards for its investors. The company has grown its revenue and earnings by more than 17% annually for three decades — and delivered reliable cash payments to its shareowners since it initiated its dividend in 2004.

You can expect this strong financial performance to continue. Governments are lobbing billions of dollars of tax incentives at TSMC to construct new manufacturing sites to bolster their supply chains and ensure increasingly vital access to the latest chips. TSMC, in turn, plans to build factories in the U.S., Germany, and Japan in the coming years.

Demand for AI chips is already fueling the tech titan’s growth. TSMC’s net revenue surged 34% year over year to 195.2 billion new Taiwan dollars ($6.1 billion) in March.