Stock splits for high-profile companies like Nvidia are typically celebrated by avid retail investors. This is because it will reduce the price per share of the company, providing access to a larger investment base. Additionally, Nvidia’s 10-1 stock split has sparked chatter on its potential to replace Intel (NASDAQ:INTC) in the Dow Jones Industrial Average.
While Nvidia undoubtedly remains a key player, several other AI stocks have emerged as promising contenders. These companies are strategically positioned to capitalize on the growing demand for AI-powered software solutions across various industries. From chip manufacturers to networking giants, this backdrop provides investors with ample opportunity to cash in on the AI gold rush.
Now, let’s discover the best AI stocks to buy after the Nvidia stock split in June 2024.
Taiwan Semiconductor (TSM)
Taiwan Semiconductor (NYSE:TSM) is the world’s largest dedicated semiconductor foundry and a crucial player in the AI landscape. The company’s advanced chip manufacturing capabilities make it a primary beneficiary of the growing demand for AI-powered solutions.
TSM’s dominance in the semiconductor industry, coupled with its strong relationships with leading tech companies, positions it for continued growth in the AI era. It currently holds more than 50% market share in semiconductor foundry services. This is a significant competitive advantage, as one of its leading competitors, Intel, continues to lose billions. Furthermore, management forecasts more than 20% revenue growth in the 2024 fiscal year.
Strong demand for AI data center graphics processing units will be a primary driver, as well as the company’s strategic investments in new manufacturing facilities across the globe. Wall Street is turning extra bullish after the company’s revenue for May increased 30.1% year over year (YOY). While this is impressive, the back half of 2024 could prove even more promising with the Nvidia stock split in motion.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is a global semiconductor and infrastructure software solutions provider. Its diverse portfolio includes a wide range of products and services that are essential to the development and deployment of AI applications.
Broadcom’s strong foothold in the semiconductor industry, combined with its expertise in the AI network infrastructure, makes it a key enabler of the AI revolution. For instance, its networking solutions are crucial for the efficient transmission of data in AI systems. Its storage solutions, including storage adapters, controllers, and integrated circuits, are essential for managing the vast amounts of data generated by AI applications.
The company’s record revenue, earnings and free cash flow in the 2023 fiscal year is only a small testament to its true growth potential. This is because the acquisition of VMWare significantly underscores its long-term growth prospects. For FY24, management forecasts consolidated revenue of approximately $50 billion, with adjusted EBITDA of around $30 billion. As demand for AI applications continues to surge, Broadcom stock is undoubtedly one of the best AI stocks to buy in 2024 and beyond.
Arista Networks (ANET)
Arista Networks (NYSE:ANET) is a leading provider of cloud networking solutions, specializing in high-performance, low-latency data center switches. The company’s networking solutions are essential for the efficient operations of AI systems, which require high-speed, and reliable transmission of data.
Arista Networks has largely flown under the radar over the last 5 years. However, the stock has significantly outperformed the market, rising 403% compared to the S&P 500’s 85%. This can be attributed to its strong revenue and earnings growth, coupled with its growing free cash flow profile. In Q1 FY24, revenue increased 16% year over year to $1.57 billion. Net earnings swelled 46% year-over-year to $637.7 million, or $1.99 per share.
Demand for network switches has remained extremely high due to the proliferation of large language models and other advanced AI applications. Additionally, hyperscalers including Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) are increasingly choosing Arista for cloud network switches. If you’re looking for one of the top AI stocks to buy after the Nvidia stock split, ANET stock should be one of the first places to look.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.