Latest news with #dataCenters
New York Times
30 minutes ago
- Business
- New York Times
Wall St. Is All In on A.I. Data Centers. But Are They the Next Bubble?
Artificial intelligence still seemed the stuff of science fiction when a real estate developer named Chad Williams bought a plot of land, roughly half the size of a football field, in Overland Park, Kan. Mr. Williams, who had taken over his family's business of car lots and office furniture suppliers, used the land in 2003 to build his first data center, a big, boxy warehouse housing powerful computers. More than two decades later, the company Mr. Williams built, Quality Technology Services, is at the heart of one of Wall Street's biggest gambits: the race to profit from artificial intelligence. The private equity giant Blackstone spent $10 billion in 2021 to acquire QTS, and has been pouring billions more into the company to help it expand its data centers. These giant buildings house the backbone of the internet — and more recently artificial intelligence systems — using technology and heating and cooling systems to keep the computers inside the centers humming. This largely unglamorous industry is critical for A.I. leaders to get right. QTS leases its facilities to companies like Amazon and Meta and supplies the electricity and water needed to power and cool their computers. Want all of The Times? Subscribe.
Globe and Mail
14 hours ago
- Business
- Globe and Mail
2 AI Stocks to Buy in June
Artificial intelligence (AI) is sweeping across the corporate landscape, increasing labor productivity and the speed of innovation. This technology is projected to have a $20 trillion impact on the global economy by 2030, according to IDC. Here are two AI stocks to profit off this opportunity. 1. CoreWeave There are billions of dollars pouring into data centers to prepare for an AI -driven economy. But many of the world's data centers are equipped with legacy equipment and not up-to-date for the demands of AI workloads. This is a huge opportunity for CoreWeave (NASDAQ: CRWV), one of the leading operators of purpose-built data centers for AI. CoreWeave just completed its initial public offering this year, but its first earnings report as a public company reveals incredible demand for its cloud computing services. Revenue is soaring, increasing from $189 million in the first quarter of 2024 to $982 million in the 2025 first quarter. Moreover, it had a massive and growing revenue backlog worth $25.9 billion in the first quarter, an increase of 63% over the year-ago quarter. Much of this year-over-year increase was driven by a recent $11.9 billion deal with ChatGPT maker OpenAI. The growing revenue backlog indicates significant long-term financial commitments for the company's services. It generates revenue either on a contractual basis or on demand, but most of its revenue comes from contracts, which can extend over several years. Investors are usually willing to pay high price-to-sales multiples for companies that have a high visibility to future revenue like CoreWeave. One risk investors will want to watch is whether it can secure enough power over time to run its data centers and meet growing demand. Large data centers need a significant amount of electricity, and that could create challenges with growing demand for AI. CoreWeave appears to be in good shape on this front. It says it has 420 megawatts of power supporting 33 AI-optimized data centers across the U.S. and Europe. It has also contracted to receive additional power, providing it with up to 1.6 gigawatts over a multiyear period. The stock's market cap sits at $53 billion at the time of this writing. Based on the company's 2025 revenue outlook, this represents a forward price-to-sales ratio of 11, which seems fair for a fast-growing infrastructure-as-a-service provider. As the company continues to report strong growth, this valuation can support new highs for the stock in 2025 and beyond. 2. Advanced Micro Devices Nvidia has been the leading AI chip supplier for data centers, but it can't control 100% of this $500 billion opportunity. There is also growing demand for chips from Advanced Micro Devices (NASDAQ: AMD), and its stock trades at an attractive valuation that makes it a compelling buy ahead of this long-term opportunity. AMD has experienced mixed results across its business segments over the past year. While its data center and client segments (including sales of PC chips) are seeing strong growth, its gaming and embedded segments (including sales to industrial markets) have been underwater. In the first quarter, AMD's revenue fell 3% over the previous quarter but soared 36% year over year, driven by data centers and strong demand for its Ryzen processors for PCs. The high margins from data center chips contributed to a robust 55% year-over-year increase in adjusted earnings, which shows the company can still drive tremendous growth even when some segments are experiencing weak demand. The data center momentum makes the stock a compelling buy. There were recently more than 30 computing workloads launched using its fifth-generation EPYC Turin chip across the leading cloud providers, including Alibaba, Amazon, Alphabet 's Google, and Oracle. The company also made an important strategic move to narrow the competitive gap with Nvidia. Its recent acquisition of ZT Systems will allow it to provide AI computing systems combining chips, networking, and software. Nvidia has offered a full-stack solution to gain a strong foothold in the data center market, but AMD will now be able to offer something similar to win more business. With management seeing a recovery in the second half of the year for its embedded chip business, AMD could see strong momentum by this time next year. The stock seems to be underestimating its growth prospects, trading at just 28 times 2025 earnings estimates. Should you invest $1,000 in CoreWeave right now? Before you buy stock in CoreWeave, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%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 May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has positions in Advanced Micro Devices, CoreWeave, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Nvidia, and Oracle. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
Yahoo
14 hours ago
- Business
- Yahoo
2 AI Stocks to Buy in June
CoreWeave is a pure-play investment in the growing demand for AI data centers. Advanced Micro Devices continues to see strong demand for its data center chips. 10 stocks we like better than CoreWeave › Artificial intelligence (AI) is sweeping across the corporate landscape, increasing labor productivity and the speed of innovation. This technology is projected to have a $20 trillion impact on the global economy by 2030, according to IDC. Here are two AI stocks to profit off this opportunity. There are billions of dollars pouring into data centers to prepare for an AI-driven economy. But many of the world's data centers are equipped with legacy equipment and not up-to-date for the demands of AI workloads. This is a huge opportunity for CoreWeave (NASDAQ: CRWV), one of the leading operators of purpose-built data centers for AI. CoreWeave just completed its initial public offering this year, but its first earnings report as a public company reveals incredible demand for its cloud computing services. Revenue is soaring, increasing from $189 million in the first quarter of 2024 to $982 million in the 2025 first quarter. Moreover, it had a massive and growing revenue backlog worth $25.9 billion in the first quarter, an increase of 63% over the year-ago quarter. Much of this year-over-year increase was driven by a recent $11.9 billion deal with ChatGPT maker OpenAI. The growing revenue backlog indicates significant long-term financial commitments for the company's services. It generates revenue either on a contractual basis or on demand, but most of its revenue comes from contracts, which can extend over several years. Investors are usually willing to pay high price-to-sales multiples for companies that have a high visibility to future revenue like CoreWeave. One risk investors will want to watch is whether it can secure enough power over time to run its data centers and meet growing demand. Large data centers need a significant amount of electricity, and that could create challenges with growing demand for AI. CoreWeave appears to be in good shape on this front. It says it has 420 megawatts of power supporting 33 AI-optimized data centers across the U.S. and Europe. It has also contracted to receive additional power, providing it with up to 1.6 gigawatts over a multiyear period. The stock's market cap sits at $53 billion at the time of this writing. Based on the company's 2025 revenue outlook, this represents a forward price-to-sales ratio of 11, which seems fair for a fast-growing infrastructure-as-a-service provider. As the company continues to report strong growth, this valuation can support new highs for the stock in 2025 and beyond. Nvidia has been the leading AI chip supplier for data centers, but it can't control 100% of this $500 billion opportunity. There is also growing demand for chips from Advanced Micro Devices (NASDAQ: AMD), and its stock trades at an attractive valuation that makes it a compelling buy ahead of this long-term opportunity. AMD has experienced mixed results across its business segments over the past year. While its data center and client segments (including sales of PC chips) are seeing strong growth, its gaming and embedded segments (including sales to industrial markets) have been underwater. In the first quarter, AMD's revenue fell 3% over the previous quarter but soared 36% year over year, driven by data centers and strong demand for its Ryzen processors for PCs. The high margins from data center chips contributed to a robust 55% year-over-year increase in adjusted earnings, which shows the company can still drive tremendous growth even when some segments are experiencing weak demand. The data center momentum makes the stock a compelling buy. There were recently more than 30 computing workloads launched using its fifth-generation EPYC Turin chip across the leading cloud providers, including Alibaba, Amazon, Alphabet's Google, and Oracle. The company also made an important strategic move to narrow the competitive gap with Nvidia. Its recent acquisition of ZT Systems will allow it to provide AI computing systems combining chips, networking, and software. Nvidia has offered a full-stack solution to gain a strong foothold in the data center market, but AMD will now be able to offer something similar to win more business. With management seeing a recovery in the second half of the year for its embedded chip business, AMD could see strong momentum by this time next year. The stock seems to be underestimating its growth prospects, trading at just 28 times 2025 earnings estimates. Before you buy stock in CoreWeave, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and CoreWeave 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has positions in Advanced Micro Devices, CoreWeave, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Nvidia, and Oracle. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy. 2 AI Stocks to Buy in June was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
a day ago
- Business
- Globe and Mail
5 Brilliant Stocks to Buy in June
As the calendar flips to June and we have nearly reached the halfway point of 2025, stocks are nearly flat for the year despite the turmoil in the market. As of the time of writing, the S&P 500 is basically flat for the year. Although the landscape has shifted since 2025 began, stock prices are generally the same. That may worry some investors, but I'm focused on the long term, and it still looks bright for many companies. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » If you shift your mindset from five months to five years, all five of these stocks look incredibly attractive, which is why I think they're solid buys for June. Nvidia Nvidia (NASDAQ: NVDA) is a leading artificial intelligence (AI) stock, providing graphics processing units (GPUs) widely used in training and running AI models. However, we haven't come close to the computing capacity needed to run an AI-first business approach across the entire economy, which is why Nvidia cites third-party estimates that data center capital expenditures will rise from $400 billion in 2024 to $1 trillion by 2028. That's huge growth, and the company will be a massive beneficiary from that trend because it gets the majority of its revenue from GPUs specific to data centers. The company crushed it during its 2026 first quarter (ending April 27), with revenue rising 69%. While some headwinds are brewing with its China business, Nvidia still offers a compelling growth case that makes me want to purchase more shares. Taiwan Semiconductor Taiwan Semiconductor Manufacturing (NYSE: TSM) is an even more neutral way to play the AI race, as nearly all high-tech companies use TSMC (as its known for short) as their chip foundry. Its business model is to offer the most advanced chip production available to attract clients that want to have their chips fabricated. Because it isn't marketing its own chips to its clients, it removes the conflict of interest facing other chip foundries. Because it's one of the most widely used foundries in the world, it has phenomenal vision into the future, because chip orders are often placed years in advance. Over the next five years, management expects AI-related revenue to have a 45% compound annual growth rate (CAGR), and overall revenue to rise at nearly a 20% CAGR. That's impressive growth over five years, and the stock can still be purchased for around 21 times forward earnings, which is less than the S&P 500 trades at (22.1 times forward earnings). That's an incredible deal for a company expected to outgrow the market, making Taiwan Semiconductor Manufacturing a no-brainer buy in June. Alphabet Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) is even cheaper than TSMC, at a mere 18 times forward earnings. GOOGL PE Ratio (Forward) data by YCharts. That's well below the S&P 500, and even further behind its big tech peers. There is a lot of pessimism surrounding Alphabet's stock, including AI disruption and a potential breakup forced by the U.S. government. This has caused the stock to drop and have a less-than-market multiple, but I think that's a mistake. The company already entered the AI race and is offering AI-powered search and AI overviews to bridge the gap between traditional search and a full generative AI experience. And we're years away from learning the outcome of its various court cases. As a result, I think the fear concerning Alphabet's stock is overblown, and I think it's an excellent value play right now. Adobe Adobe (NASDAQ: ADBE) faces the same AI-induced fears as Alphabet does. Investors are worried that images created by generative AI could steal market share from Adobe. But most of these image-creation engines lack the control that a product like Adobe provides. Furthermore, its Firefly -- its own generative AI software -- dovetails nicely into its existing product line. Adobe hasn't seen a ton of disruption yet, and its revenue is still rising at a steady pace. ADBE Operating Revenue (Quarterly YoY Growth); data by YCharts. YoY = year over year. The stock trades around 20 times forward earnings. That's a cheap price tag, especially when you consider the pace at which the company is repurchasing shares, which will cause its earnings per share (EPS) to rise much faster than revenue. This makes Adobe a great value pick for June. If you're patient, the stock will reward shareholders with market-beating performance. Amazon Lastly, Amazon (NASDAQ: AMZN) has many investors worried about how tariffs will impact its e-commerce business, which is a reasonable fear. However, they need to understand that the majority of the company's profit doesn't come from its commerce divisions; it comes from Amazon Web Services (AWS). AWS is Amazon's cloud computing wing, and it accounted for only 19% of revenue in the first quarter. However, because its operating margin is superior to the commerce side of the business, it accounted for 63% of total operating profits. As AWS goes, so will Amazon's stock, since it is the profit driver. Cloud computing benefits from two trends: AI and the general migration to the cloud. AWS is slated to grow rapidly over the next few years, which will push company profits higher because it accounts for the majority of the profits. With the market concerned about how tariffs will affect Amazon's commerce business, I'm using its weakness to buy shares. I'm looking at it as more of a cloud computing play than a commerce one. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%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 May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Adobe, Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Adobe, Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Yahoo
a day ago
- Business
- Yahoo
Here's Why You Should Retain 3M Stock in Your Portfolio Now
3M Company MMM has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in roofing granules, industrial adhesives and tapes, and electrical markets. Strong demand for cable accessories, driven by an increase in the construction of data centers and renewable energy projects, augurs well for the segment in the quarters ahead. The segment's organic sales improved 2.5% year over year in the first quarter of company's Transportation and Electronics segment has also been benefiting from strength in the transportation and aerospace end markets. Solid momentum in the commercial aircraft and defense-related business and project wins in the advanced materials business are proving beneficial for the segment. However, weakness in the electronics business, due to lower demand for devices, remains a concern. The segment's adjusted organic revenues grew 1.1% in the first quarter.3M has been undertaking structural reorganization actions to reduce the size of its corporate center, streamline its geographic footprint and simplify the supply chain. It expects these actions to be completed by 2025 and yield annual pre-tax savings. In the first quarter of 2025, these actions, together with strong organic volume and productivity, raised 3M's adjusted operating margin by 220 basis points year over year to 23.5%. For 2025, the company expects the adjusted operating margin to increase 130-190 basis points year over year. Image Source: Zacks Investment Research In the past year, shares of this Zacks Rank #3 (Hold) company have gained 41% compared with the industry's 3.3% persistent weakness in the consumer retail end markets, owing to a decrease in consumer discretionary spending, remains a concern. This is reflected in the Consumer segment's results, which declined 1.4% in the first quarter. There was a particular softness in the command and packaging expression businesses as high debt level remains another concern for its profitability. Exiting first-quarter 2025, the company's long-term debt was $12.3 billion, reflecting an increase of 10.8% sequentially. Its short-term borrowings and current portion of long-term debt totaled $1.2 billion. Considering its high debt level, 3M's cash and cash equivalents of $6.3 billion do not look impressive. It's worth noting that MMM's long-term debt-to-capital ratio is currently 73.1%, much higher than the industry's 55.2%. Some better-ranked stocks are discussed Signal Corporation FSS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks delivered a trailing four-quarter average earnings surprise of 6.4%. In the past 60 days, the Zacks Consensus Estimate for Federal Signal's 2025 earnings has increased 1.6%.Unifirst Corporation UNF currently carries a Zacks Rank of 2. UNF delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the consensus estimate for Unifirst's fiscal 2025 (ending August 2025) earnings has increased 4.1%.AptarGroup, Inc. ATR presently carries a Zacks Rank of 2. ATR delivered a trailing four-quarter average earnings surprise of 7.3%. In the past 60 days, the consensus estimate for AptarGroup's 2025 earnings has increased 4.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report 3M Company (MMM) : Free Stock Analysis Report Unifirst Corporation (UNF) : Free Stock Analysis Report AptarGroup, Inc. (ATR) : Free Stock Analysis Report Federal Signal Corporation (FSS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
