An AI-driven investment manager is naming three technology giants it says are best positioned to benefit from the artificial intelligence boom.
In a new Squawk Box interview, Doug Clinton, Intelligent Alpha founder and CEO, believes the AI trade still has momentum amid the massive capital expenditure (CapEx) spending spree.
“Oracle, I can say this. They are a stock to watch. They’ve had a great year so far, up 90% now year to date. And I think there’s a bigger thing that’s going on as we think about what happened with their earnings, why the stock was up so much this week. And the reason is because I think we got a question answered, which is we keep wondering, when are the hyperscalers going to slow down this CapEx spend?
And the answer from Oracle, I think pretty definitively, is no time soon. And if you look at companies like Google and Amazon, the expectations for them for CapEx next year are high single digits, 10%.
I think that’s too low. I think all of these hyperscalers driven by Oracle’s strong entry into this cloud game, they’re going to have to continue to invest in building more infrastructure because the demand for AI services is there.”
Amid the sustainable demand for AI services backdrop, Clinton unveils his top technology picks for 2025 based on the firm’s artificial intelligence models.
“We do use AI to do our stock analysis, our stock picking in the mega-cap space… But what I think our models do like, they’re continuing to say, ‘Look, if you think about, call it the tremendous 10 or whatever we want as we add Oracle, TSM, Broadcom to the Mag 7, we do like NVIDIA first, Microsoft, and then TSM.’
Those are our three picks that our models favor the most. And I think if you think about that reality, NVIDIA continues to have this demand that we’ve talked about. There will continue to be this data center buildout. TSM also benefits from that. And then obviously the Microsoft pieces, they’re still the leaders, in my opinion, on the AI data infrastructure side.”
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