AI Sector Poised for $20 Trillion Impact by 2030
Artificial intelligence (AI) is transforming corporate productivity and innovation. IDC projects AI will generate a $20 trillion economic impact by 2030. Investing in AI stocks may provide opportunities for growth.
CoreWeave: A Leading AI Data Center Operator
Significant investments are directed toward modernizing data centers for an AI-driven era. Many current facilities lack the necessary infrastructure for AI workloads, presenting a chance for CoreWeave (NASDAQ: CRWV), a key player in AI-optimized data centers.
CoreWeave recently went public, and its inaugural earnings report showed a remarkable surge in demand for its services. Revenue jumped from $189 million in Q1 2024 to $982 million in Q1 2025.
Furthermore, the company has established a growing revenue backlog of $25.9 billion, a 63% increase year-over-year, partly due to an $11.9 billion contract with OpenAI.
This backlog indicates strong future revenue visibility, predominantly from long-term contracts. Investors often favor companies like CoreWeave with predictable revenue streams.
A risk to watch is the company’s ability to secure adequate power for its data centers amid rising demand, as they require substantial electricity. CoreWeave has 420 megawatts of power across 33 centers and has contracted for up to 1.6 gigawatts over several years.
Currently, the company’s market cap is $53 billion. Based on projected 2025 revenues, it trades at a price-to-sales ratio of 11, which appears reasonable for a growing infrastructure provider.
Advanced Micro Devices: Competing in the AI Chip Market
While Nvidia leads the AI chip market, Advanced Micro Devices (NASDAQ: AMD) is also gaining traction in this $500 billion sector with attractive valuations for investors.
AMD’s performance varied across its segments in the past year. Data center and client segments are thriving, while gaming and embedded sectors are lagging.
For Q1, AMD’s revenue fell 3% quarter-over-quarter, but it rose 36% year-over-year due to data center growth and demand for Ryzen processors, leading to a 55% increase in adjusted earnings year-over-year.
The company’s advancements in the data center space strengthen its investment appeal. Over 30 workloads launched using its fifth-generation EPYC Turin chip with major cloud providers like Alibaba, Amazon, Alphabet’s Google, and Oracle.
AMD’s acquisition of ZT Systems enhances its competitiveness against Nvidia, allowing it to offer integrated AI computing solutions.
Management anticipates a recovery for its embedded chip segment in the latter half of the year, which may provide further momentum. AMD trades at 28 times 2025 earnings estimates, potentially undervaluing its growth prospects.
Investment Considerations
Investors should assess CoreWeave before making any commitments. Notably, it was not included in Motley Fool‘s recent list of top stocks, which identified 10 stocks with high return potential.
The stock advisor’s historical performance highlights substantial returns from earlier recommendations like Netflix and Nvidia.
For the latest insights on promising investments, consider checking the top stocks from the advisor’s team.
The views expressed in this article are those of the author and do not necessarily reflect those of Nasdaq, Inc.
