Unveiling My Favorite Two Artificial Intelligence (AI) Shares for 2025, Excluding Nvidia From the List

Unveiling My Favorite Two Artificial Intelligence (AI) Shares for 2025, Excluding Nvidia From the List

In the future, AI investment is set to stay robust, with a predicted $337 billion spent globally in 2025. Surprisingly, enterprises embedding AI capabilities into their core operations are expected to dominate spending, accounting for 67% of the total. Furthermore, tech giants like Google, Meta, and ByteDance are continuing to invest heavily in AI infrastructure.

Leading the charge in application-specific integrated circuits (ASICs) is Broadcom, which produces custom chips tailored for specific tasks. These chips are more energy-efficient and excel in their designated functions. Due to their efficiency, cloud computing giants such as Google, Meta, and ByteDance have chosen Broadcom's custom AI processors for their data centers.

Broadcom's AI-focused customer base is poised for substantial growth in the following three years, with modern cloud hyperscalers predicted to deploy one million custom AI chip clusters. This expansion is driven by Broadcom's efforts to secure new customers, with two additional cloud giants currently in advanced stages of development for their next-gen AI processors.

Broadcom sees an addressable market for AI of $60 billion to $90 billion in fiscal 2027, hinting at a significant growth opportunity. This potential increase in revenue is expected to result from Broadcom's control of an estimated 55% to 60% share of the ASIC market, as reported by JPMorgan.

Growth investors might still see value in Broadcom, considering its low PEG ratio of 0.7, indicating an undervalued stock given projected earnings growth for the next five years. Armed with impressive revenue growth of 108% over the past year, Broadcom remains an intriguing prospect for investors.

Another firm to watch in the AI landscape is Snowflake, a data consolidation platform that allows enterprises to collect data centrally and utilize it for various purposes, including AI applications. Snowflake's Cortex AI platform has seen significant adoption, with over 3,200 customers leveraging its tools for a variety of applications since its introduction in mid-2023.

Also, Snowflake announced its Snowflake Intelligence Platform in November 2022, enabling enterprises to create AI agents in a secure environment and make informed decisions based on that information. With the agentic AI market predicted to reach $45 billion in 2025, Snowflake's market opportunity could expand, potentially boosting its future earnings.

Snowflake exhibited impressive growth, with its quarterly revenue skyrocketing 29% year-over-year to $900.3 million, while its remaining performance obligations surged 55% to $5.7 billion in Q3 of fiscal 2025. Furthermore, its net revenue retention rate was a healthy 127%, implying existing customers remain committed to the platform.

As more Snowflake customers adopt its AI offerings, revenue and earnings growth could accelerate. By leveraging its AI-centric solutions, Snowflake might be well-positioned for solid earnings growth in the upcoming years, making it an intriguing AI stock investment option.

In light of Broadcom's predicted growth in the AI market, smart investors might consider diversifying their portfolio by investing in companies that focus on AI as well. For instance, Snowflake, with its Cortex AI platform and Snowflake Intelligence Platform, seems to be capitalizing on the growing market for agentic AI, potentially offering substantial returns.

As enterprises worldwide continue to invest heavily in AI technology, companies like Broadcom and Snowflake that provide efficient AI solutions are likely to see significant financial gains, making them attractive investment options in the finance sector.

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