Right now, the twin forces of the artificial intelligence (AI) build-out and relentless demand for connectivity are lifting some of the strongest names in technology and telecom. Here are five compelling stocks worth buying more of, starting with the one everyone is watching.
Image source: Getty Images.
1. Broadcom
Broadcom (AVGO +1.97%) has quietly become one of the most important companies in AI. It designs the custom chips that giants, including Alphabet (GOOG 0.67%) (GOOGL 0.61%) and Meta Platforms, use to run their own AI systems, and it dominates the networking gear that ties thousands of those chips together inside a data center. On top of that, its infrastructure software business, anchored by VMware, throws off steady, high-margin revenue that cushions the more cyclical chip side. With a massive AI order backlog and a clear path toward much larger AI sales, Broadcom pairs explosive growth with a diversified base most chipmakers lack.
Today’s Change
(1.97%) $7.43
Current Price
$385.59
Key Data Points
Market Cap
Day’s Range
$379.24 – $390.45
52wk Range
$273.00 – $495.00
Volume
356.8K
Avg Vol
26.2M
Gross Margin
65.66%
Dividend Yield
0.67%
2. Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (TSM +5.01%) is the company that builds the world’s most advanced chips, including those designed by Broadcom and Nvidia. Its management recently called AI demand “extremely robust” and raised its growth outlook, while pouring another $100 billion into its Arizona campus and ramping its cutting-edge 2-nanometer technology. Because nearly every leading chip company depends on its factories, Taiwan Semiconductor sits at an irreplaceable chokepoint in the AI economy. That is about as wide a moat as you will find.
Taiwan Semiconductor Manufacturing
Today’s Change
(5.01%) $20.15
Current Price
$422.45
Key Data Points
Market Cap
Day’s Range
$413.60 – $422.61
52wk Range
$223.70 – $479.00
Volume
585.7K
Avg Vol
14.1M
Gross Margin
63.38%
Dividend Yield
0.87%
3. Alphabet
Alphabet combines the cash machine of Google Search with a fast-growing cloud business and its own leading AI models. The company is investing enormous sums, including a plan to raise tens of billions to fund its AI infrastructure, and it is weaving AI across its products rather than being disrupted by it. Notably, Berkshire Hathaway built a large stake in Alphabet, a vote of confidence from the most famous value investor’s company that this is a wonderful business at a fair price.
Today’s Change
(-0.61%) $-2.15
Current Price
$349.84
Key Data Points
Market Cap
Day’s Range
$347.60 – $351.32
52wk Range
$187.46 – $408.61
Volume
464.2K
Avg Vol
31.8M
Gross Margin
60.43%
Dividend Yield
0.24%
4. T-Mobile
T-Mobile (TMUS 2.29%) is the growth story in telecom. It keeps stealing customers from rivals, and its real momentum now is in home internet, where it added more than 500,000 broadband connections in a single recent quarter. It’s also expanding into fiber through new joint ventures, giving it a second broadband engine, and it raised its multiyear growth targets on the strength of its network lead. For a telecom, that’s an unusually dynamic growth profile.
5. Verizon
Verizon Communications (VZ 0.40%) offers the steadier, income-focused counterpart. It just closed its acquisition of Frontier, which dramatically expanded its fiber footprint to more than 30 million homes and businesses, and it’s leaning into bundling fiber with wireless to defend its customer base. The appeal here is different from the others: a hefty dividend and a defensive business, which makes Verizon a nice ballast alongside the higher-octane AI names on this list.
Adding to winners is not risk-free. The AI-linked names, especially Broadcom, Taiwan Semiconductor, and Alphabet, trade at elevated valuations and are exposed to the ups and downs of the semiconductor cycle, so a slowdown in AI spending would sting. Taiwan Semiconductor also carries geopolitical risk given its home base. On the telecom side, Verizon carries significant debt, and both carriers operate in a fiercely competitive, capital-hungry industry. Buying more works best when you already believe in the long-term story.
I think each ticker is executing well enough to justify adding to a position, provided you match the picks to your goals: tech names for growth, telecoms for a blend of growth and income. As always, buy gradually and let the businesses, not the headlines, prove the thesis.
Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, Broadcom, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.
