Which AI Stocks May Soar After Reaching Record Highs?

After declines earlier in the year, many artificial intelligence (AI) stocks have rebounded and even skyrocketed amid optimism that U.S. trade decisions won't weigh heavily on growth. Which of these players might continue to soar after reaching record highs recently?

Nvidia (NASDAQ: NVDA), Oracle (NYSE: ORCL), and Broadcom (NASDAQ: AVGO) still have plenty of room to run. Here's why.

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Nvidia

Nvidia has played the principal role in the initial stages of the AI boom, the period of infrastructure build-out, thanks to the company's powerful AI chips. Known as graphics processing units (GPUs), they power one of the key early steps crucial to AI: the training of models. This has helped Nvidia report double- and triple-digit revenue growth over the past several quarters, with revenue reaching record levels.

The reason why Nvidia could remain on this path is that the company hasn't only built a solid position in the GPU market -- it's also created a full portfolio of related products and services so that a customer aiming to build and deploy AI could rely on Nvidia every step of the way. The company even has looked ahead to future growth drivers, such as the convergence of AI and quantum computing. Nvidia recently announced its development of a quantum research center to match quantum hardware with AI supercomputers.

All this suggests Nvidia's fast-paced growth isn't set to stop. And with the speed of innovation and news in the AI and quantum fields, catalysts for stock performance may pop up pretty frequently.

Finally, Nvidia's valuation -- with the stock trading for 36x forward earnings estimates -- is reasonable, offering room for additional gains.

Oracle

Oracle was once most associated with database management, and its software still dominates in that area. But the company has expanded significantly over its nearly 50-year history, and today has found itself among leaders in the cloud infrastructure space. Customers love Oracle because it offers them great flexibility, with the ability to simultaneously use Oracle along with other clouds -- thanks to the Oracle multicloud service -- and access to other options as well.

On top of this, Oracle offers customers cloud applications, which is proving to be another growth area. In fact, speaking of growth, the company reported double-digit increases in revenue across its businesses in the latest quarter. For example, cloud infrastructure revenue advanced 52% to $3 billion, while cloud application revenue added 12% to $3.7 billion.

What makes me most optimistic regarding revenue growth to come, though, are two elements. First, remaining performance obligations (RPO), or revenue yet to be booked from signed contracts, has surged in recent quarters. In the most recent, it rose 41% to $138 billion.

Second, demand for Oracle's cloud capacity also has been soaring -- the company said a customer in the recent quarter asked to take all available capacity, regardless of its location. These are positive signs for growth ahead, suggesting Oracle stock could keep on marching higher in the second half of this year.

Broadcom

Broadcom is a networking specialist, making thousands of products, used everywhere from your smartphone to data centers. But the company has truly seen business take off amid the demand for AI. In the latest quarter, for instance, AI semiconductor solutions and infrastructure software powered revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) higher.

First-quarter AI revenue jumped 77% to $4.1 billion, while infrastructure software revenue climbed 47% to $6.7 billion. And the company predicted that the momentum will be ongoing as major cloud companies ramp up data centers, requiring chips and connectivity. Broadcom said it expects the current growth rate to continue into the next fiscal year, considering training and inferencing demand.

And speaking of demand, Broadcom says it's been "tremendous" for its newest launch, the Tomahawk 6, the latest version of its Ethernet switching product, as customers aim for speed across AI workloads. In fact, Broadcom says its complete networking portfolio, including switches, routers, and network interface cards (NICs), are "driving our success" with these large-scale AI customers.

All this suggests that Broadcom's earnings momentum will remain strong, and that could be the key to more stock price gains in the months to come.

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Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Nvidia and Oracle. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.