<div id="readability-page-1">Global spending on artificial intelligence (AI) is expected to remain solid in 2025, with market research firm IDC estimating that organizations are likely to pour $337 billion into this technology as they integrate AI tools into their business operations. Notably, IDC estimates that 67% of the projected AI spending this year &#34;will come from enterprises embedding AI capabilities into their core business operations, surpassing investments in leading cloud and digital service providers.&#34; At the same time, cloud computing giants are set to continue spending big money on building out their AI infrastructure. Nvidia has been at the forefront of the AI boom with its powerful graphics processing units (GPUs) that have helped major tech giants train large language models (LLMs). And there is a good chance that the chipmaker will continue to witness impressive growth in its revenue and earnings. However, we will take a look at two other names that are also on track to benefit from the proliferation of AI in different verticals and see why they can turn out to be top AI picks for 2025. <h2>Broadcom: A solid AI chip stock to buy</h2> While Nvidia is dominating the market for AI GPUs, Broadcom (AVGO 1.84%) is leading the charge in application-specific integrated circuits (ASICs). These are custom chips that can be programmed to perform specific tasks, unlike GPUs that can perform multiple tasks and are used for general computing purposes. The specific nature of ASICs makes them more energy-efficient and adept at tackling the tasks they are designed to do. This explains why cloud computing giants are using Broadcom's custom AI processors, known as XPUs, to power their data centers. Reports suggest that Broadcom could be manufacturing chips for Meta Platforms, Alphabet's Google, TikTok parent ByteDance, and OpenAI. It has now emerged that even Apple could tap Broadcom to manufacture its AI server chip. Broadcom management pointed out on the company's December 2024 earnings conference call that it is supplying its custom AI chips to three cloud hyperscale customers. The company notes that these customers are on track to deploy one million of its custom AI chip clusters over the next three years. Additionally, Broadcom says it has &#34;been selected by two additional hyperscalers and [they] are in advanced development for their own next-generation AI XPUs.&#34; This expanding AI customer base could lead to outstanding financial growth for Broadcom over the next three years. That's because the chipmaker sees its addressable market in AI reaching a range of $60 billion to $90 billion in fiscal 2027. For comparison, Broadcom's AI revenue stood at $12.2 billion in the recently concluded fiscal 2024, which was a massive increase of 220% from the preceding year. The size of the addressable market suggests that AI is likely to supercharge Broadcom's growth in 2025 and beyond, especially considering that it controls an estimated 55% to 60% of the ASIC market, as per JPMorgan. Not surprisingly, analysts have raised their revenue estimates for the current and the next two fiscal years. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/b73c01fa7f45a5dfee85a68a3ae7e994.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="380" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/b73c01fa7f45a5dfee85a68a3ae7e994.png"/> AVGO Revenue Estimates for Current Fiscal Year data by YCharts However, Broadcom may be able to deliver stronger growth than analysts expect following the potential addition of new customers. In addition, its price/earnings-to-growth ratio (PEG ratio) stands at just 0.7 right now based on its estimated earnings growth for the next five years, as per Yahoo! Finance. A PEG ratio of less than 1 means that a stock is undervalued with respect to the earnings growth that it is expected to deliver, suggesting that growth investors can still consider buying Broadcom even after the impressive 108% gains that it has delivered in the past year. <h2>Snowflake: The application of AI to enterprise data is going to be a tailwind for the company</h2> While the likes of Broadcom and Nvidia produce chips that allow major cloud computing companies to train LLMs, Snowflake (SNOW -0.47%) gives customers an avenue to consolidate their data into a single platform. Its customers can then use this data to build generative AI apps, gain insights into their data, or solve business-related challenges by applying AI to that data. So, Snowflake has a huge addressable market to tap in 2025, considering that IDC is expecting a big chunk of AI spending to go toward embedding AI capabilities in businesses' operations. The good part is that Snowflake's AI-focused solutions are already gaining healthy traction among customers. The company's Cortex AI platform, for instance, is &#34;showing significant adoption,&#34; as per management. Customers can use Cortex AI to analyze their data and build generative AI apps, find specific information within documents, and get access to popular LLMs such as Llama and Anthropic Claude. As it turns out, over 3,200 of Snowflake's customers are already using its AI and machine learning (ML) features. That's impressive, considering that Snowflake started rolling out its AI offerings in mid-2023, and it has continued to add more services so it can give users access to a wider range of tools. The company has also made a move into the fast-growing market for AI agents as well with the Snowflake Intelligence platform, which was announced in November last year. This platform will enable enterprises to create AI agents, which can analyze and summarize data in a secure environment and then take action using those insights. With the agentic AI market expected to clock an estimated revenue of $45 billion in 2025, Snowflake's AI-focused addressable opportunity should ideally expand. As a result, there is a solid chance that the company will be able to clock better-than-expected growth going forward. After all, Snowflake's remaining performance obligations (RPO) shot up an impressive 55% in the third quarter of fiscal 2025 (which ended on Oct. 31, 2024) to $5.7 billion. That was significantly higher than the 29% year-over-year increase in its quarterly revenue to $900.3 million. RPO refers to the unfulfilled contracts of a company that will be recognized as revenue in the future when those contracts are executed. So, faster growth in this metric, as compared to Snowflake's top line, points toward a potential acceleration in growth. Existing customers spent more on its platform, as evidenced by a net revenue retention rate of 127% during the quarter. The metric compares the spending by Snowflake's customers in a quarter to the spending by those same customers in the prior-year period, so a reading of more than 100% indicates that the adoption of its services by existing customers grew. This is a trend that's likely to continue as more Snowflake customers start using its AI offerings. Snowflake had just over 10,600 customers at the end of the previous quarter, and 30% of them are using its AI/ML solutions. So, as the company upsells its AI products to more customers, it could witness a nice improvement in both revenue and earnings. All this explains why Snowflake is expected to deliver 40%-plus earnings growth for the next couple of fiscal years. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/c4ee0190d540cc9c800804749fcadef2.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="380" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/c4ee0190d540cc9c800804749fcadef2.png"/> SNOW EPS Estimates for Current Fiscal Year data by YCharts As such, Snowflake looks like a top AI stock to buy, considering that its addressable market is likely to expand nicely in 2025 thanks to the addition of AI-centric tools in its data cloud platform, which should set the stage for outstanding earnings growth going forward. </div>

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Global AI spending is projected to reach $337 billion in 2025, with 67% coming from enterprises integrating AI into operations. While Nvidia leads in AI GPUs, Broadcom is excelling in ASICs, supplying custom AI chips to major companies like Meta and Google, with a potential market growth to $90 billion by 2027. Snowflake is also positioned well, offering AI solutions for data consolidation and application development. Both companies are expected to benefit significantly from the AI boom in the coming years.

- Global spending on artificial intelligence (AI) is projected to reach $337 billion in 2025, with 67% coming from enterprises integrating AI into operations.  
- Broadcom is positioned to benefit significantly from this trend, supplying custom AI chips to major tech companies, while Snowflake offers a platform for businesses to consolidate data and build AI applications.  
- Both companies are expected to experience substantial growth, with Broadcom's AI revenue increasing by 220% in fiscal 2024 and Snowflake anticipating over 40% earnings growth in the coming years.

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My Top 2 Artificial Intelligence (AI) Stocks for 2025 (Hint: Nvidia Is Not One of Them)