Family office deal-making has fallen this year as investors wait for clarity
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an hour ago
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Broadcom is no longer the 'poor man's Nvidia' in the AI race
Artificial intelligence (AI) continues to be a key theme of Big Tech earnings, as Alphabet (GOOG, GOOGL) kicked off "Magnificent Seven" earnings with very high additional AI capital expenditure (CapEx), a positive sign for AI chipmakers. Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, and Stacy Rasgon, managing director and senior analyst at Bernstein, share their thoughts on two major AI chip players: Nvidia (NVDA) and Broadcom (AVGO). To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. I think you guys are on the same page when it comes to Nvidia. You've got a buy equivalent rating on it, Stacey. Nancy likes that one. Let's talk about Broadcom for a minute because Nancy, this is one that you've liked for a while. Um, do you still like it? What are you going to be looking for from Broadcom, Nancy, going forward? Yeah, we do, Julie. I mean, it's our largest holding across all of our large cap equity strategies, member of our 12 best, our five for 25. I think, uh, and it's outperformed Nvidia pretty handily over the last year, almost double the returns for Nvidia on a trailing one year. We've always called it the poor man's Nvidia. I think we're going to have to come up with a new name. But one of the things that we're going to be paying attention to is, of course, um, the AI revenues. We we've we've seen those compound at 60 plus percent. They've announced new partnerships. We want to hear more about that. Um, it seems that the rest of the business, the rest of the chip business may have bottomed. We'd like to hear some some information and and confirmation about that. And then I just think, you know, it's just going to be about the future guidance. And Hock Tan has demonstrated he can acquire companies, make them accretive quickly. We bought the stock when, uh, it sold off on the computer associates that used to be the name of the company they acquired. Wall Street didn't like it. They turned it around, made it a very positive acquisition. So we we'll be listening for that, too. Are there any acquisitions they're they're planning to make? And I certainly hope one of them is not Intel. Yeah, that would be something. Uh, Stacey, um, along with Nvidia, is Broadcom sort of, are those the sort of must-owns in the chip space? Yeah, I frankly, in in chips, it hasn't been great outside of AI, right? I mean, AI's been super strong. The analog, more diversified guys, like the people who were playing those on cyclical recovery, some of those prints so far this earning season have not not been so great. There's worries about pull forward and everything else. Again, you got companies like Intel which which frankly are a basket case. I mean, if it wasn't for AI, this space would not be doing very well. So I I do like the AI names. We cover Nvidia and Broadcom. I like them both. Um, Broadcom is is just more expensive than it used to be. That's the only only, you know, it was Right. I guess hence Nancy's comment that they're going to have to rename it from the poor man's video. Yeah, and look, you know, you got to remember Broadcom like not all that long ago was like 16 times earnings, like now it's like the multiple's like like doubled, right? Um, they are showing a lot of AI upside. A lot of that comes next year, but they they're clearly, I mean even the last earnings call a couple of months ago, they're clearly calling for upside in their AI revenues next year on more inference demand. They're a massive player on AI networking, right? So there's there there's a a big play there. And and and Nancy, I think, is right, they have the core semi business which admittedly has been lousy. They're not the only ones. Everybody in though in those kinds of markets has has been lousy. It it doesn't look like getting any worse at least. I we can we can argue about when it's going to start getting better. I don't know yet, but at least it isn't getting worse. Um, you know, if you're looking in in into the near term, I mean you could argue, again, we we like both stocks. Nvidia is cheaper. And you know, you know, they just they just got their China licenses, um, reinstated, so there's probably more upside to their AI numbers this year for Nvidia versus Broadcom. I think the Broadcom AI upside comes next year and Broadcom's a little more expensive. Um, and then there's a whole ASIC versus, you know, GPU debate. But I I think you can own them both. Like I I I like them both. And again, AI is the only thing in semis right now that fundamentally is really working.
Yahoo
an hour ago
- Yahoo
1 Super Artificial Intelligence (AI) Stock Billionaire Bill Gates Has 25% of His Foundation's Portfolio Invested In
Key Points The Gates Foundation holds a substantial number of Microsoft shares. Microsoft has become a top player in offering artificial intelligence models. However, the stock is starting to appear somewhat pricey compared to its peers. 10 stocks we like better than Microsoft › Bill Gates is a well-known entrepreneur, having co-founded Microsoft (NASDAQ: MSFT) in the mid-1970s. This made him a fortune, and he constantly ranks among the richest people in the world. He established the Gates Foundation Trust, one of the world's most well-funded foundations. By examining its holdings, investors can gain insight into what one of the world's brightest minds considers top stock picks, and they've identified an AI stock that has been a stellar performer in recent years. In fact, the stock has more than doubled since the start of 2023 alone. What is this stock? It's none other than Microsoft. Microsoft is the foundation's top holding This really shouldn't come as a surprise to anyone. Bill Gates runs the fund, so he will fill it with a company that he thinks will succeed. Most of this stock was donated from Gates' wealth; however, if the foundation didn't think Microsoft was set to succeed, they would have sold it a long time ago and moved on to something else. About 25% of the foundation's worth is tied up in Microsoft stock, valued at around $10.7 billion. That's a concentrated bet for a charitable foundation, but it has worked out well with Microsoft's recent success. Microsoft has emerged as a top AI pick due to its role as a facilitator in the space. It isn't developing its own generative AI model; instead, it's offering many of the leading ones on its cloud computing platform, Azure. Developers can choose from OpenAI's ChatGPT, a leading option, Meta Platforms' Llama, DeepSeek's R1 (a more affordable alternative from China), or xAI's Grok, a company founded by Elon Musk. By offering a wide range of generative AI models, Microsoft isn't locking its clients into a single provider. This has made Azure a top choice for building AI models on, which is why it has outgrown its peers in recent quarters. We'll get an update on how the other cloud computing providers -- namely Alphabet's Google Cloud and Amazon's Amazon Web Services (AWS) -- in the next few weeks, but I'd be shocked if Azure isn't growing quicker than they are. Azure has become a top platform for building AI applications, but has it done enough to make Microsoft a top buy now? Microsoft's stock is starting to look a bit pricey for its growth If Microsoft derived all of its revenue from Azure, I'd be a buyer at nearly any price. However, Microsoft has other product lines that aren't growing as quickly, which slows the company's overall growth pace. In its latest period -- the third quarter of fiscal 2025 -- overall revenue rose to $70.1 billion at a 13% pace. While Microsoft doesn't break out the revenue generated by Azure, we know from prior information that it accounts for over half of the Intelligent Cloud division, which brought in $26.8 billion during Q3 (ending March 31). They do provide Azure's growth rate, which was Microsoft's top-performing division in Q3, rising 33% year over year. Microsoft's diluted earnings per share also rose an impressive 18%, but is that fast enough to justify its valuation? Microsoft trades at nearly 40 times trailing earnings, which is a very expensive price tag and exceeds its recent highs reached during the AI arms race period. Wall Street analysts project $15.14 in earnings per share for fiscal 2026 (ending June 30, 2026), which indicates the stock trades at 33.7 times forward earnings. That's still a high valuation, and investors need to start being a bit cautious when stocks reach that level, especially when they're growing at Microsoft's pace. Yes, Microsoft is growing faster than the market, but it's not growing as fast as some of its peers. Take Meta Platforms, for example. It trades at 28 times trailing earnings and grew revenue at a 16% pace during its last quarter with 36% earnings-per-share growth. That's a cheaper stock growing faster, which should cause Microsoft investors to question whether it's the best big tech stock to be in right now. Numerous other big tech stocks have better growth numbers and cheaper valuations than Microsoft. Although it's a dominant company, it's starting to look a bit expensive compared to its peers. Should you buy stock in Microsoft right now? Before you buy stock in Microsoft, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Keithen Drury has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 1 Super Artificial Intelligence (AI) Stock Billionaire Bill Gates Has 25% of His Foundation's Portfolio Invested In was originally published by The Motley Fool Sign in to access your portfolio
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an hour ago
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5 Reasons to Buy Nvidia Stock Like There's No Tomorrow
Key Points AI spending continues to grow robustly, creating greater demand for Nvidia's GPUs. Nvidia continues to dominate the AI chip market. New markets and technological advances present tremendous growth opportunities for Nvidia. 10 stocks we like better than Nvidia › Why should you not invest in Nvidia (NASDAQ: NVDA) right now? You'd definitely be late to the party buying shares of a company with a market cap of $4.2 trillion. Other stocks could have better growth prospects. Nvidia is also expensive, with a forward earnings multiple of over 38. I'm not going to focus on the bear case for Nvidia, though. The bull case looks even more compelling. Here are five reasons to buy Nvidia stock like there's no tomorrow. 1. AI spending is growing Any concerns that spending on artificial intelligence (AI) by cloud service providers and other customers would slow have evaporated. Alphabet gave more proof in its second-quarter update. The company raised its full-year capital expenditure guidance by $10 billion. This increase is due to Google Cloud investing in servers and data centers to meet rapidly growing demand. We haven't heard Amazon's and Microsoft's quarterly updates yet. However, I'd be surprised if their stories aren't similar to Google's. And when these cloud titans are investing more in servers and data centers, you can bet that a lot of the money will go to buy chips from Nvidia. 2. Continued GPU dominance There's a simple reason why customers are still turning to Nvidia: Its graphics processing units (GPUs) continue to dominate the AI market. Even with Google developing its tensor processing units (TPUs) and Amazon deploying its Inferentia and Trainium chips, Nvidia's seat on the throne remains secure. Blackwell, Nvidia's newest GPU architecture, has delivered the fastest commercial ramp-up in the company's history. In the first quarter of fiscal 2026, Blackwell GPUs generated almost 70% of Nvidia's data center compute revenue. Keep in mind that these chips began shipping in significant volumes just earlier this year. 3. The CUDA moat Can Nvidia sustain its grip on the AI chip market? It seems likely, thanks to what some refer to as the company's "CUDA moat." CUDA (which stands for Compute Unified Device Architecture) is Nvidia's proprietary platform that allows programmers to use its GPUs. This architecture has been around for years, with millions of programmers using it. There's also an extensive library of code that's optimized for Nvidia's GPUs. The bottom line is that Nvidia's competitive advantage in AI chips probably won't disappear as long as the CUDA ecosystem remains strong. 4. Expanding into new markets Nvidia has a successful track record of expanding into new markets. The company started out making chips for gaming systems before recognizing that its GPUs were ideal for powering AI models. It continues to move into new markets. For example, Nvidia's Omniverse platform, which enables the creation of 3D simulations and digital twins, is already used by multiple major corporations. I suspect it could be a bigger growth driver in the future than meets the eye. The company's Drive platform should also enable it to profit as autonomous vehicles become more widely adopted. Nvidia CEO Jensen Huang recently told shareholders that robotics represents the company's largest opportunity after AI. And while Huang seemed to pour cold water on expectations for quantum computing earlier this year, he stated at a conference in June that the technology "is reaching an inflection point." Unsurprisingly, Nvidia is investing heavily in quantum computing. 5. Tomorrow will be more exciting than today Perhaps the most important reason to buy Nvidia stock like there's no tomorrow is that there will be a tomorrow -- and it will almost certainly be more exciting than today. The advancement of AI over the next few years, including the advent of AI agents and potentially artificial general intelligence (AGI), could turbocharge the demand for Nvidia's GPUs. So could the proliferation of humanoid robots. Huang told analysts on Nvidia's Q1 earnings call, "The age of AI is here. From AI infrastructures, inference at scale, sovereign AI, enterprise AI, and industrial AI, Nvidia Corporation is ready." I think he was right. Do the experts think Nvidia is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Nvidia make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,041% vs. just 183% for the S&P — that is beating the market by 858.71%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Keith Speights has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 5 Reasons to Buy Nvidia Stock Like There's No Tomorrow was originally published by The Motley Fool
