The artificial intelligence sector is experiencing immense growth, with a backlog of over $1 trillion in cloud computing contracts from giants like Amazon, Microsoft, and Google fueling demand for AI infrastructure. This surge is a boon for key suppliers such as TSMC and Nvidia, who are central to building these advanced systems. Broadcom is also emerging as a significant player with its custom AI accelerators. In the realm of AI development and services, SoundHound AI is reporting record revenue, up 217% in its latest quarter, and has seen its stock climb 90% in three months, though profitability remains a focus. Datadog is enhancing its observability and security platforms with new AI features to consolidate enterprise solutions amidst competition. Oracle is reportedly in talks with Meta for an AI cloud computing deal and has seen its stock price rise significantly, outperforming the market. Meanwhile, Tesla's stock is being driven by AI and autonomous driving ambitions, despite recent sales declines and concerns about overvaluation. Applied Digital and Dell Technologies are identified as undervalued stocks with strong potential in AI infrastructure, with Applied Digital building data centers rapidly and Dell seeing robust AI server sales. In the autonomous vehicle space, ComfortDelGro is partnering with Pony AI for robotaxi services in Singapore, though Pony AI faces challenges with mounting losses. Datavault AI has secured a $150 million investment from Scilex to accelerate its infrastructure development. On the regulatory front, Binance Alpha faces hurdles for its ChainOpera AI trading platform launch, particularly concerning AML/KYC compliance in Europe and the U.S. Medirom Healthcare Technologies Inc. saw its stock surge over 228% on news of AI collaborations and expansion plans for its authentication device. Lastly, Jefferies has downgraded Bloom Energy, cautioning that AI data center hype might be overshadowing the company's fundamentals.
Key Takeaways
- A backlog exceeding $1 trillion in cloud computing contracts from Amazon, Microsoft, and Google highlights massive demand for AI infrastructure.
- Nvidia and TSMC are key beneficiaries of this AI infrastructure demand, supplying essential chips and fabrication services.
- Broadcom is positioning itself as a major AI hardware player with its custom AI accelerators (XPUs).
- SoundHound AI's stock has risen 90% on record revenue growth, with a focus on achieving profitability.
- Oracle is in discussions with Meta for an AI cloud computing deal, contributing to a significant rise in Oracle's stock price.
- Tesla's stock is influenced by its AI and autonomous driving advancements, despite recent sales challenges.
- Applied Digital and Dell Technologies are considered undervalued in the AI infrastructure market.
- ComfortDelGro is partnering with Pony AI to launch robotaxis in Singapore, though Pony AI faces financial hurdles.
- Datavault AI received a $150 million investment from Scilex to boost its AI and blockchain infrastructure.
- Binance Alpha's ChainOpera AI trading platform launch faces regulatory challenges in Europe and the U.S.
Applied Digital and Dell: Undervalued AI infrastructure stocks
Applied Digital and Dell Technologies are highlighted as undervalued stocks with significant potential in the AI infrastructure market. Applied Digital is benefiting from a major AI infrastructure deal with CoreWeave and is rapidly building data centers to meet growing demand. Dell is experiencing strong sales of AI servers and is well-positioned due to its partnerships and ability to supply advanced server technology. Both companies are seen as having the potential to outperform the market.
Broadcom: The next AI household name?
Broadcom, a $1.6 trillion company, is poised to become a major player in the AI space, potentially becoming a household name like Nvidia. Its AI business includes connectivity switches and custom AI accelerators called XPUs, which are designed for specific workloads and offer cost advantages. While Broadcom's stock is not cheap, its AI revenue is growing rapidly, and the company is expected to capture significant market share in the expanding AI hardware market.
AI backlog exceeds $1 trillion, benefiting TSMC and Nvidia
A massive backlog of over $1 trillion in contracts for cloud computing companies like Amazon, Microsoft, and Google signals huge demand for AI infrastructure. This trend is a significant opportunity for Taiwan Semiconductor Manufacturing (TSMC) and Nvidia, key players in building this infrastructure. TSMC, the world's largest semiconductor foundry, fabricates advanced AI chips, while Nvidia dominates the data center GPU market. Both companies are expected to see continued growth as cloud providers expand their data centers to meet this demand.
Datavault AI receives $150M investment from Scilex
Datavault AI has secured a significant $150 million investment from Scilex, with an initial tranche of 15 million shares already transferred. This funding, facilitated by a Bitcoin transaction, aims to accelerate Datavault AI's infrastructure development and market expansion in AI and blockchain. Despite current financial challenges, the investment signals confidence in Datavault AI's patented technology and its potential in sectors like biotech and energy. Further tranches are dependent on shareholder approval.
Medirom stock surges on AI and expansion news
Medirom Healthcare Technologies Inc. saw its stock price surge dramatically, with gains exceeding 228% following announcements of AI collaborations and expansion plans. The company's stock climbed significantly after revealing a collaboration with 'World' on AI identity verification using its Orb authentication device. Medirom also announced plans to expand the Orb device's installation in Japan, further boosting investor optimism. These developments have led to substantial trading volume and heightened market activity.
Binance Alpha faces regulatory hurdles for ChainOpera AI launch
Binance Alpha is preparing to launch its ChainOpera AI trading platform on September 25, 2025, but faces significant regulatory challenges, particularly concerning AML and KYC compliance in Europe and the U.S. The platform must also navigate evolving data privacy laws like the EU's Digital Services Act. To drive user engagement, Binance Alpha is offering COAI token airdrops, though the long-term success will depend on retaining users beyond initial incentives. Integrating AI aims to improve financial management and transparency within crypto trading.
SoundHound AI stock up 90% on record revenue
SoundHound AI, a voice AI specialist, has seen its stock price increase by 90% in the last three months, driven by record revenue growth of 217% in the latest quarter. The company's technology enables natural conversations with AI, and it has secured clients in various industries, including automaking and healthcare. While SoundHound AI has raised its revenue guidance, it still faces the challenge of achieving profitability. Investors are watching for progress on its adjusted EBITDA profitability goal by the end of the year.
Datadog unveils new AI and security features amid competition
Datadog is reinforcing its position in observability and security with new features announced at DASH 2025, aiming to capitalize on enterprise cloud adoption and AI integration. These innovations support vendor consolidation as companies seek unified solutions. While facing rising competition and cost-focused alternatives, Datadog's platform breadth remains a key strength. The company anticipates significant revenue and earnings growth by 2028, though investors are monitoring competitive pressures and potential revenue concentration risks.
Oracle stock price target raised amid AI cloud and TikTok deal talks
An analyst has maintained an Outperform rating and a $342 price target for Oracle Corporation (ORCL) following several key developments. These include management changes, reaffirmed guidance, reports of talks with Meta for an AI cloud computing deal, and a potential stake in TikTok's U.S. business. Oracle's shares have already seen a 90% year-to-date increase, outperforming the broader market.
ComfortDelGro partners with Pony AI for Singapore robotaxis
ComfortDelGro is partnering with Pony AI to launch autonomous vehicle services in Singapore, starting with fixed routes in Punggol pending regulatory approval. This move signifies Pony AI's expanding international presence, following recent milestones in the Middle East and Singapore. While the partnership could boost momentum, Pony AI faces challenges including mounting losses and an untested management team, with profitability not expected for at least three years. The company's shares have risen, but its high price-to-book ratio and ongoing losses maintain an elevated risk profile.
Tesla's AI ambitions drive stock hype despite sales decline
Tesla's stock is attracting investor attention due to its advancements in AI and autonomous driving, with one analyst raising the price target to $600 and predicting a $2 trillion market cap by early 2026. However, the stock holds a 'Hold' consensus rating amid concerns about overvaluation and competition. In the UK, Tesla has experienced a sales decline, attributed to product mix and incentives. CEO Elon Musk's political activities have also reportedly impacted the company's reputation.
Jefferies downgrades Bloom Energy amid AI data center hype
Jefferies has downgraded Bloom Energy (BE) stock from Hold to Underperform with a $31 price target, citing concerns that investor enthusiasm for AI data center energy demands may be outpacing the company's fundamentals. The firm noted limited visibility into growth prospects beyond 2026 and early signs of over-exuberance. Bloom Energy develops solid-oxide fuel cell systems, but Jefferies believes the risks outweigh potential upside at current levels.
Sources
- Undervalued and Ignored: 2 Artificial Intelligence (AI) Stocks With Market-Beating Potential @themotleyfool #stocks $APLD $MSFT $GOOGL $NVDA $DELL $CRWV
- Prediction: This Artificial Intelligence (AI) Stock Will Be The Next Household Name @themotleyfool #stocks $AVGO $NVDA
- Artificial Intelligence (AI) Backlog Has Exceeded $1 Trillion: 2 Ways You Can Benefit From This Massive Number
- Datavault AI Secures Major $150M Investment Boost from Scilex
- Medirom Stock Skyrockets Amid AI Collaborations and Expansion News
- ChainOpera AI Launch: Regulatory Hurdles and Market Strategies
- Up 90%, Should You Buy SoundHound AI Right Now? @themotleyfool #stocks $SOUN $NVDA
- How Investors Are Reacting To Datadog (DDOG) Unveiling AI and Security Features Amid Rising Competition
- Oracle (ORCL) Stock: Analyst Reiterates $342 PT Amid AI Cloud and TikTok Deal Buzz
- ComfortDelGro and Pony AI's Singapore Robotaxi Deal Might Change The Case For Investing In Pony AI (PONY)
- Tesla’s AI Ambitions Ignite Stock Hype Amid Sales Woes
- Why Jefferies Cut Bloom Energy (BE) to Underperform Despite AI Data Center Hype