<div id="readability-page-1">Over the past few years, the artificial intelligence (AI) market has grown like a weed as new generative AI applications have changed how people interact with computers. These applications also replaced some human workers by automating tasks, optimizing workflows, and interacting with customers, and they could disrupt a broad range of industries in the near future. In hopes of profiting from this trend, many investors flocked to AI stocks. However, some companies that eagerly jumped on that bandwagon either exaggerated the growth potential of their AI projects or merely rebranded some of their older technologies as AI services. To cut through that noise, investors should consider focusing on the key players that provide the hardware foundation upon which the AI market is being built -- companies like Nvidia (NVDA -0.10%) and Oracle (ORCL 3.33%). They're both massive tech companies already, but they are positioned to grow even larger over the next few years as the AI market keeps growing. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzMyNzEvYWktY2hpcC5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="350" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzMyNzEvYWktY2hpcC5qcGcmdz03MDA"/>Image source: Getty Images. </div> <h2>Nvidia</h2> Nvidia, the world's largest producer of discrete graphics processing units (GPUs), still sells the best picks and shovels for the AI gold rush. Its GPUs once were mainly used to power video games, but now, it generates most of its revenue from selling data center GPUs. Unlike CPUs, which have a few powerful cores that handle complex processes and commands in sequence, GPUs are parallel processors that break certain types of large computing tasks down into thousands of smaller ones and then solve them simultaneously using thousands of simpler cores. For most of the processing that your computer or smartphone might need to do, a CPU is the better tool. But for AI-related work, GPUs are far more efficient. All of the world's leading AI software and infrastructure companies -- including OpenAI, Microsoft, Alphabet, and Meta -- use Nvidia's data center GPUs. Nvidia also locks in its developers into its ecosystem with CUDA (Compute Unified Device Architecture), a proprietary programming platform that can be used to optimize its GPUs -- and only its GPUs -- to perform specific tasks. Between the high quality of its hardware and the popularity of CUDA among developers, the company has kept a firm hold on more than 90% of the discrete GPU market, and data center customers are still gobbling up its latest Blackwell chips. From its fiscal 2025 through its fiscal 2028 (which will end in January 2028), analysts expect Nvidia's revenue and EPS to both grow at a compound annual rate of roughly 35%. And though its stock has rallied by more than 30,000% over the past decade, turning it into the world's most valuable company with a market cap of $4.3 trillion, it still isn't expensive, trading at about 29 times next year's expected earnings. <h2>Oracle</h2> Oracle, the world's top database software provider, was once a slow-growth tech company viewed as having limited potential. But over the past decade, it transformed its on-site software into cloud-based services, expanded its cloud infrastructure platform, and launched more enterprise resource planning (ERP) tools. During those 10 years, Oracle repatriated billions of dollars in cash that it had been holding overseas, aggressively expanded its ecosystem with acquisitions, and bought back more than a third of its shares outstanding in a bid to boost its EPS. That expansion and evolution helped it grow its revenues and profits again, even as it faced stiff competition from Amazon, Microsoft, and Google in the cloud infrastructure market. Oracle also rolled out more AI tools across its cloud platform to process more generative AI applications. In its latest quarterly report, delivered last week, the company predicted its cloud infrastructure revenue would surge by 77% to $18 billion in fiscal 2026 (which will end in May 2026) and account for 27% of its revenue. Management also predicted that figure would surge to $32 billion in fiscal 2027, $73 billion in fiscal 2028, $114 billion in fiscal 2029, and $144 billion in fiscal 2030. It expects that explosive growth to be mostly driven by its massive cloud deals with AI leaders like OpenAI, xAI, and Meta. From fiscal 2025 through fiscal 2028, analysts expect Oracle's revenue and EPS to grow at compound annual rates of 26% and 28%, respectively. The stock might not seem like a bargain trading at 51 times next year's expected earnings, but it could still have plenty of upside potential as Oracle's cloud and AI businesses expand. </div>

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The AI market is rapidly expanding, attracting investors to AI stocks. Key players like Nvidia and Oracle are positioned for significant growth. Nvidia, the leading GPU producer, dominates the market with over 90% share and is expected to see a 35% annual revenue growth through fiscal 2028. Oracle, once slow-growing, has transformed into a cloud-based service provider, predicting a 77% surge in cloud revenue by fiscal 2026, driven by AI partnerships. Analysts forecast Oracle's revenue and EPS growth at 26% and 28%, respectively, through fiscal 2028.

- The artificial intelligence (AI) market has rapidly expanded, leading to increased automation and investor interest in AI stocks.  
- Key players like Nvidia and Oracle are positioned for significant growth, with Nvidia dominating the GPU market and Oracle transforming into a cloud-based services provider.  
- Analysts predict substantial revenue growth for both companies, with Nvidia's revenue expected to grow at 35% and Oracle's cloud infrastructure revenue projected to surge significantly over the next few years.

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