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Investors are piling into the Magnificent 7 tech giants including…
Alphabet (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA).
These stocks are fueling most of the YTD gains for the S&P 500 and the Nasdaq.
Huge interest in Artificial Intelligence is fueling the gains for those stocks.
Each of the Magnificent 7 stand to benefit from Artificial Intelligence. For example, Nvidia credits artificial intelligence as a key reason for its 114% sales growth in the first quarter. And Microsoft is expected to gain market share thanks to its new search engine that’s powered by OpenAI.
There is no doubt – AI is giving big tech a much-needed boost after a horrible performance last year.
However, most investors are buying the big tech stocks because there are few alternatives.
There simply are not that many pure-play AI stocks that are 100% focused on this opportunity.
I’m looking at the IPO market as the solution…
The strength of the Nasdaq shows that investors have resumed their love affair with tech stocks. Meanwhile, many pure-play AI stocks have already doubled this year.
There are finally signs of life in the IPO market.
Cava (NASDAQ: CAVA) is a Mediterranean fast casual restaurant chain with over 250 locations. The IPO raised nearly $300 million for the company. Shares nearly doubled on the first day of trading – rising from $22 to nearly $44.
An Abu Dhabi AI firm also went public in May. Presight AI Holdings was looking to raise $496 million in an IPO. Investment bankers had orders from investors for over $25 billion worth of the stock – meaning that the deal was oversubscribed by 136-times.
Those are big numbers…
It shows strong demand for AI stocks – with investors lining up to invest billions in the next AI stock winner.