The data that Alphabet possesses is invaluable. Data, on which AI models are trained, is the opposite side of the coin from computation, if you will. Alphabet, owner and operator of the two most popular websites in the world, YouTube and Google Search, is perhaps the best at collecting data than any other corporation. With 280 billion visits between them in November alone, they far outpaced third place's 18 billion.
Each and every one of Alphabet's website visits is being recorded. There is a video view for every search and click. Alphabet generates the majority of its income and profit from the sale of advertising using its data. It also puts Alphabet in a prime position to leverage its data and AI for improved advertising or the development and sale of its AI products, such as Bard
Despite its scale, Alphabet's ad division continues to show strong growth, giving investors reason to hold the company. The astonishing $65.5 billion in ad revenue was an 11% year-over-year growth in Q4. It generates free cash flow for Alphabet in the tens of billions of dollars per year, making it a golden goose.
The stock has a strong long-term floor since management is using the cash to repurchase shares and improve profits per share. Additionally, investors have the opportunity to profit from Alphabet's AI innovation potential.
3. An essential ally for companies considering AI investments Super Micro Computer isn't as famous as the brands listed above, but it doesn't mean you should overlook it. Corporations may rely on the company's modular server systems.
Computer systems designed for artificial intelligence (AI) or other high-tech applications aren't like those you buy at the shop and assemble according to the directions. Companies often lack the knowledge or interest in building their own systems. The solution is provided by Super Micro Computer's own hardware and know-how.
Since corporate computers gained popularity in the early 1990s, Super Micro Computer has maintained a good IT reputation. Super Micro Computer's recent rise is also due to AI. Revenue rose 103% to $3.66 billion in fiscal year 2024 Q2. Its 73% rise over Q1 revenue suggests that AI is still a new effect on its firm. Businesses rely on Super Micro Computer for AI system deployment speed and efficiency.
Despite the stock's stratospheric jump after Q2 earnings, the company's AI momentum implies it may have more growth potential. The market prices the business at 27 times ahead profits, and analysts expect long-term earnings to rise 25% (estimates might be revised higher after a strong Q2). The company's PEG ratio is just above 1, making it a bargain for its predicted growth. Naturally, nothing is certain. If AI delivers, Super Micro Computer's exceptional reputation may attract AI-related contracts, which bodes well for its financial future.
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