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Despite the stock market's current volatility, the longer-term outlook of technology is bright because large companies are going to invest in AI in order to reduce their costs and grow, Daniel Newman, the CEO of the Futurum Group told Schwab Network today.
Newman is most bullish on tech names that have a great deal of exposure to large companies and relatively little exposure to consumers.
He identified Nvidia (NVDA), Microsoft (MSFT), and Broadcom (AVGO) as three stocks that he likes at this point.
Why Newman Is Bullish on NVDA
Nvidia is a leader in its space, and has the "software framework, (and) stacks" that it needs to succeed, Newman stated. Additionally, it will benefit from huge capital expenditures by the major cloud players, including Alphabet (GOOG, GOOGL) and Microsoft (MSFT), Newman asserted.
Why Newman Is Upbeat on MSFT and AVGO
MSFT will benefit from the large amount of revenue that it obtains from companies and its low exposure to consumers, Newman stated. Moreover, its high capital expenditures will improve its position coming out of any economic downturn, the tech analyst predicted.
AVGO is helping the large cloud players develop their own AI infrastructure. Over the longer term, the major cloud developers will want to create a significant amount of such infrastructure to become more independent, according to Newman.
While we acknowledge the potential of NVDA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
