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The AI Investing Pulse

July 31, 2025

In this Week’s Edition:

1. Analysis - 3 standout stocks powering the AI superhighway

2. Stock Ideas - Warren Buffett’s 5 stocks that are leveraging AI

3. News - Does Palantir have more upside than any other AI stock

4. Startups - How Databricks is quietly becoming one of the most powerful AI stock

5. Trends - Trump's big beautiful bill hands AI stocks a powerful catalyst

6. Other News - Godfather of AI Geoffrey Hinton slams big tech for ignoring AI risks

3 Standout Stocks Powering the AI Superhighway

As artificial intelligence accelerates into every facet of the modern world, it’s easy to overlook the invisible infrastructure that keeps the data flowing. In reality, robust network and connectivity solutions are just as essential as the AI chips themselves. With each new leap in AI sophistication, demand for fast, secure, and scalable data transfer is only growing.

This week, we turn the spotlight to three standout companies powering the “AI Superhighway”—each playing a vital role in the Network & Connectivity layer and exhibiting distinct strengths according to our proprietary ranking model.

1. Broadcom Inc. $AVGO ( ▼ 0.54% )  

• Sector / Industry: Technology / Semiconductors

• AI Stack Layer: Network & Connectivity (AI in Networking Chips and Semiconductors)

• Market Cap: $1.4T

• Performance YTD: 31.2%

• Total Score: 100.0 (out of 100)

• Relative Strength (RS): 88 (out of 100)

• Ranking Status: ✔️ Watchlist

🧠 What It Does:
Broadcom is a leading force in the Network & Connectivity layer of the AI stack, embedding AI directly into its networking chips and semiconductor platforms. The company’s development of XPUs—custom AI accelerators optimised for specific workloads—offers a powerful alternative to traditional GPUs.

💡 Why It Stands Out:
Broadcom achieves our highest Watchlist ranking, with a perfect Total Score and a strong RS of 88. This reflects a combination of stellar fundamentals and significant market momentum. With XPUs seeing rapid adoption among hyperscalers for AI model training and inference, Broadcom is positioned as a serious contender to Nvidia and a major player in the ongoing AI arms race.

📊 Technical Snapshot:
Broadcom is currently trading at all-time highs and approaching potential resistance at an upper trendline. It’s worth watching for any signs of consolidation or reversal near this level as the stock tests new territory.

2. Arista Networks Inc. $ANET ( ▲ 0.43% )  

• Sector / Industry: Technology / Computer Hardware

• AI Stack Layer: Network & Connectivity (High-performance networking and data centre infrastructure)

• Market Cap: $153B

• Performance YTD: 10.5%

• Total Score: 75.8

• Relative Strength (RS): 73

• Ranking Status: 📊 Fundamental

🧠 What It Does:
Arista Networks delivers high-performance networking solutions and cloud data centre infrastructure—key building blocks for the AI ecosystem’s efficient operation.

💡 Why It Stands Out:
With a strong Total Score of 75.8, Arista is a top Fundamental Candidate. It boasts exceptional financial quality (Financial Quality Score: 100) and healthy growth (Growth Score: 75). While its RS of 73 is just shy of our momentum threshold, it’s trending higher. The company’s 64.1% gross margin and zero debt-to-equity ratio further highlight its financial strength and long-term prospects in high-performance AI networking.

📊 Technical Snapshot:
Arista is in a clear uptrend, trading above all major moving averages and now closing in on its all-time high.

3. Cloudflare, Inc. $NET ( ▼ 0.22% )  

• Sector / Industry: Technology / Software – Infrastructure

• AI Stack Layer: Network & Connectivity (AI in CDNs and Internet Security), Security

• Market Cap: $69B

• Performance YTD: 86.5%

• Total Score: 65.1 (out of 100)

• Relative Strength (RS): 92 (out of 100)

• Ranking Status: 📈 Momentum

🧠 What It Does:
Cloudflare operates at the intersection of Network & Connectivity and Security, leveraging AI to enhance its global content delivery network (CDN) and online security solutions—ensuring the fast, secure, and reliable flow of digital information.

💡 Why It Stands Out:
Cloudflare’s RS of 92 firmly establishes its status as a Momentum Candidate, signalling strong price strength and market interest. While its Total Score of 65.1 is just under our usual fundamental threshold, its growth outlook (forecast revenue growth: 25.4%) and leadership in embedding AI into CDN and security solutions make it a company to watch in the evolving AI landscape.

📊 Technical Snapshot:
Cloudflare remains in a strong uptrend, the stock has been pausing over the last three days, hovering around the 5-day EMA on the daily chart.

🔍 Final Take

The Network & Connectivity layer is the unsung backbone of the AI revolution—enabling the high-speed, secure data transfer that advanced AI demands. Broadcom, Arista Networks, and Cloudflare each tackle a crucial part of this landscape. As AI continues to transform every industry, these names are strategically positioned to benefit from the surging need for network capacity and digital security. Keep them on your radar as essential infrastructure in the AI-driven future.

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_{Disclaimer - This content is provided for informational purposes only and does not constitute investment advice, personal recommendations, or an invitation to engage in any investment activity. The information presented is derived from publicly available sources and should not be solely relied upon for making investment decisions. Always consult with a qualified financial professional before making investment choices. Past performance is not a guide to future performance.}

_{Methodology & Scores - All scores are proprietary and calculated using data from Finbox (powered by S&P Global Intelligence). Total Score combines metrics for Sales and EPS Growth, Financial Quality, and Valuation, to assess overall business strength (out of 100). Relative Strength (RS) Score measures a stock’s price performance relative to the AI universe (173 AI-focused public companies). Ranking Status is assigned based on score combinations: Fundamental: Total Score ≥ 70, RS < 80. Momentum: RS ≥ 80, Total Score < 70. Watchlist: Total Score ≥ 70 and RS ≥ 80.}

TOP AI STOCKS PERFORMANCE

TOP AI ETFs PERFORMANCE

AI STOCKS IDEAS 

Warren Buffett’s 5 stocks that are leveraging AI - Benzinga

Is it time to stop ignoring this cybersecurity stock?  - The Motley Fool

5 AI-powered internet software stocks to power your portfolio - Nasdaq

AI STOCKS & ETFs NEWS 

Does Palantir have more upside than any other AI stock - 247 Wallst - Palantir Technologies has surged over 100% in 2025, with significant revenue growth and a 71% increase in commercial revenue, positioning it strongly among AI stocks.

AMD stock is finally giving Nvidia a run for its money - Invezz - AMD is narrowing the gap with Nvidia, showing a 28.8% stock gain driven by AI chip advancements. New GPUs aim to boost AMD's AI market share, projected at $7.6 billion by 2025.

Tempus AI TEM secures FDA clearance for new cardiovascular risk detection software - Yahoo Finance - Tempus AI has received FDA clearance for its AI-driven Tempus ECG-Low EF software, which detects low ejection fraction to assess cardiovascular risk.

Vertiv Holdings VRT forges a partnership with Oklo to create new cooling solution for data centers - Insider Monkey - Vertiv and Oklo have partnered to create integrated power and cooling solutions for data centers, utilizing Oklo's small modular nuclear reactors to enhance energy efficiency and reduce environmental impact.

AI STARTUPS

How Databricks is quietly becoming one of the most powerful AI stock- The Motely Fool - Databricks has emerged as a key player in AI and data analytics with its unified platform, serving over 15,000 organisations, and is preparing for a potential 2025 IPO with significant projected growth.

How to comply EU AI act guest post - Technical.ly - Key compliance steps for the EU AI Act, including prohibitions on harmful AI practices, due diligence requirements, and risk management expectations, with full compliance mandated by August 2027.

AI TRENDS

Trump's big beautiful bill hands AI stocks like Nvidia, Meta platforms a powerful catalyst - 247Wallst -  The Trump administration's AI Action Plan aims to secure U.S. dominance in artificial intelligence through deregulation and infrastructure investment.

How Microsoft plans to redefine the future of the internet with its open agentic web - Unite.ai - Microsoft introduces the open agentic web, enabling AI agents to autonomously interact with digital services, streamlining tasks and promoting collaboration across platforms.

AI investments surge but agentic ai understanding and adoption lag behind - Morningstar -  AI investments surged in 2025, particularly in late-stage companies like OpenAI and Anthropic. However, understanding and adoption of agentic AI technologies trail behind this financial growth.

OTHER

Godfather of AI Geoffrey Hinton slams big tech for ignoring AI risks - Mashable - Geoffrey Hinton criticized tech companies for downplaying AI risks despite being aware of them.

Will your job survive AI? - The Harvard Gazette - The AI's impact on the labour market, highlighting job displacement from automation while creating demand for complex, human-centric roles.

_{Disclaimer - The information contained on this newsletter does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice. Data sources: S&P Global Market Intelligence}