July is just around the corner, and you know what that means:
Big tech earnings season!
Next month, all of the big U.S. technology companies (and several Canadian ones) will be reporting their earnings for the second quarter, the quarter ended June 30. In these earnings releases, we will get to see whether Big Tech is making as much money off AI as the headlines say it should, or falling behind. We can be reasonably confident that NVIDIA (NASDAQ: NVDA) will do a lot of growing in the second quarter; the others are more of a grey area. In this article, I explore the three tech stocks I’d be most eager to buy in July, starting with NVIDIA’s manufacturer.
Source: Getty Images
Taiwan Semiconductor
Taiwan Semiconductor Manufacturing (NYSE: TSM) is a Taiwanese semiconductor company that manufactures chips for NVIDIA, Apple (NASDAQ: AAPL), and so many more. It is the world’s dominant semiconductor foundry (“foundry” means manufacturer, especially one like TSM that doesn’t also design chips). Because it does not design chips, Taiwan Semi lacks the conflicts of interest that sometimes prevent its competitors from acquiring business from big companies.
Taiwan Semiconductor is doing quite well as a business this year. Thanks to its NVIDIA business, its revenue has been ticking up month after month. It will also likely get a lot of business from Apple’s “Apple Intelligence” suite of features, which will be embedded inside iPhone 15 models and later. So, there’s a lot of ways for TSM to make money here.
Google/Alphabet
Alphabet Inc (NASDAQ: GOOG) is America’s fourth biggest tech company. Better known as “Google,” it has had AI embedded into its products for years. Examples of Google products incorporating AI include Google Search, Youtube, and Google Cloud.
Google also recently launched its very own ChatGPT competitor, Gemini. The app has gotten mixed reviews so far, but nevertheless has become the sixth most popular AI app globally.
Google’s financial performance has been impressive lately. In its most recent quarter, the company delivered:
- $80.5 billion in revenue, up 15%.
- $25.4 billion in operating income, up 32%.
- $1.90 in earnings per share, up 72%.
Kinaxis
Kinaxis (TSX: KXS) is Canada’s very own AI software compounder. It develops supply chain management software. Kinaxis services like RapidResponse allow businesses to keep track of key supply chain variables like inputs, inventory, and customer buying patterns.
Kinaxis has been building supply chain software since the 1980s. It started incorporating AI into its apps more recently. The company’s services provide valuable supply chain data. Today, they have AI too. So now, for example, you can have RapidResponse forecast inventory needs using customer purchasing data. In the past, you’d have had to do this manually.
Foolish takeaway
The world of generative AI has plenty of options – ChatGPT, Gemini, Bing, Midjourney. The list just goes on and on. In AI stocks, too, there are plenty of opportunities. Most know about NVIDIA, and there are plenty of others. If you’re looking for good AI stocks to invest in today, any of the names mentioned in this article are worth looking into further.
