Growth investing has been incredibly rewarding for investors who punched their ticket well ahead of the artificial intelligence (AI) boom. AI hype is giving yet another shot in the arm to the tech sector. After an incredible Worldwide Developers Conference (WWDC) hosted by Apple (NASDAQ:AAPL), the sector found itself up close to 10% in the two trading days that followed.
Surely, AAPL stock’s blistering rally crowned Apple as the world’s largest company, at least before Fed chair Jerome Powell gave his speech.
After the Fed commentary, Apple began slipping off its peak, falling just a hair below Microsoft (NASDAQ:MSFT) in the market cap race. As these two titans, along with Nvidia (NASDAQ:NVDA), continue to soar, the rules of growth investing may be changing.
As momentum in some of the AI-savviest companies picks up again, investors should look beyond The Big Three. Let’s explore three that could also power higher as the “Magnificent Three” lead the way.
Amazon (AMZN)
As powerful but compact AI models find themselves in our pockets, top public cloud firm and e-commerce disruptor Amazon (NASDAQ:AMZN) may have enough AI-induced wind at its back to help it join the company of the Magnificent Three in the $3 trillion market cap club.
With a market cap just shy of $2 trillion, AMZN stock has to gain around 57% to qualify. It may be just a matter of time before Amazon becomes a $3 trillion club member. And if Amazon has more AI in store for the next year, it will be unsurprising if it does so by next summer.
As a Magnificent Seven firm that only recently broke out to new all-time highs by only around 2%, AMZN stock stands out. It’s a great play for growth investors seeking a company that may still have untapped AI upside.
Moreover, Amazon has its Titan foundation models, Bedrock service for firms to build generative AI models, and a very impressive Q Developer for AI-assisted coding. However, there’s still more in the Amazon AI pipeline that could excite. Specifically, the Olympus large language model (LLM), under development, could be a game-changer with parameters that are measured in the trillions.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is another AI beneficiary that seems unstoppable of late. Recently, the stock reported its Q2 earnings, adding more fuel to one of the hottest AI semi-stock stories outside of Nvidia. The company didn’t just post strong earnings. It also raised its annual AI chip sales forecast by 10% and announced a stock split.
The result? AVGO stock is up more than 14% in the after-hours session.
In many ways, Broadcom’s ascent seems to rhyme with that of Nvidia’s. Many investors and analysts underestimated AI’s potential to power growth. And those left sitting on the sidelines are probably wondering if it’s too late to jump in now that AVGO stock is up close to 50% year-to-date (YTD).
At this pace, perhaps Broadcom will crack a $1 trillion valuation sooner than most think. Either way, Broadcom still isn’t the priciest AI chip stock. It may even be a relative value play given the 1.4% dividend yield and price-to-earnings (P/E) multiple that still seems grounded in reality.
Oracle (ORCL)
Oracle (NASDAQ:ORCL) has been off to the races as well, despite reporting a lukewarm quarter that fell short on the bottom line. The cloud high-flyer has AI to thank. On Wednesday, ORCL stock shot up more than 13% as investors applauded deals made with Alphabet (NASDAQ:GOOG, GOOGL) Cloud in addition to Microsoft and OpenAI.
Indeed, Oracle is joining forces with some heavy hitters on AI. No wonder investors are forgiving the sub-par earnings report.
Moving ahead, ORCL stands out as an AI cloud winner poised to continue winning as it helps do its part to meet blistering demand for AI compute. In many ways, teaming up with OpenAI seems to be the magic formula for getting investors to hit that buy button.
As Oracle builds data centers that are cheaper than many of its big-name peers, it will be interesting to see how much gas ORCL stock has left in the tank after its latest melt-up. Perhaps a $500 billion market cap may not be far off as the growth bar is raised.
On the date of publication, Joey Frenette held shares of Amazon, Alphabet (Class C), Apple, and Microsoft. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.