Nvidia, CoreWeave, Broadcom: AI Stocks to Buy Despite Inflation
💡 Key Takeaway
Nvidia, CoreWeave, and Broadcom are well-positioned to grow despite sticky inflation due to strong AI demand and attractive valuations.
What Happened: Inflation Data Sparks Rate Hike Fears, but 3 AI Stocks Stand Out
The U.S. inflation rate rose 4.2% year over year in May, its highest in three years and well above the Fed's 2% target. This could lead to rate hikes, potentially driving investors away from high-growth AI stocks.
The article argues that three AI stocks—Nvidia, CoreWeave, and Broadcom—are still worth buying on any weakness. Nvidia remains the top data center GPU producer with its proprietary CUDA platform creating customer lock-in. While facing competition from AMD and Broadcom's custom chips, Nvidia is expected to grow revenue and EPS at a 46% CAGR through fiscal 2029.
CoreWeave is a neocloud provider using Nvidia GPUs, expanding from 3 to 49 data centers. It has secured massive deals with Microsoft and OpenAI, with revenue expected to grow at a 99% CAGR through 2028.
Broadcom produces custom AI chips (ASICs) for hyperscalers. AI chip sales surged 65% to $20 billion in fiscal 2025, and the company expects them to reach $100 billion by fiscal 2027, with analysts forecasting 53% revenue and 66% EPS CAGR through fiscal 2028.
The article emphasizes that these stocks have reasonable valuations relative to their growth rates, making them resilient to inflation and rate fears.
Why It Matters: AI Stocks Offer Growth and Value in a Tightening Environment
Inflation and potential rate hikes typically pressure high-growth stocks, but these three AI companies have strong fundamentals that could insulate them from a market rotation.
Nvidia's dominant position in data center GPUs and CUDA lock-in, coupled with a forward P/E of 21, provides a margin of safety even if the market turns risk-off. Its exposure to agentic AI, government spending, and autonomous vehicles adds growth catalysts.
CoreWeave's explosive revenue growth and strategic partnerships with tech giants make it a compelling bet on AI infrastructure, despite current unprofitability. Its low price-to-sales ratio offers downside protection.
Broadcom's shift toward AI chips and bundled offerings create a diversified growth story, with AI expected to become over half of revenue by 2027. Its higher valuation is justified by faster growth and exposure to the inference market.
Collectively, these stocks represent a diversified bet on AI that can weather an inflationary environment, making them attractive for long-term investors seeking growth at a reasonable price.
Source: The Motley Fool
Analysis generated by Bobby AI quantitative model, reviewed and edited by our research team. This is not financial advice. Always do your own research before making investment decisions.
Bobby Insight
Investors should buy NVDA, CRWV, and AVGO on any weakness caused by inflation fears.
These stocks offer strong growth at reasonable valuations, making them resilient to higher rates. Their leadership in AI positions them for long-term gains, and any pullback from macro concerns should be seen as an opportunity to accumulate.
What This Means for Me
