Broadcom and Oracle as AI infrastructure plays amid the agentic chip rally

Meta's agentic AI assistant, Muse, sparked a 2.15% surge in the Nasdaq 100 today. AMD, Intel, and ARM also rose as CPU-intensive workloads for AI compounds chip demand. Oracle (ORCL) is one of the biggest beneficiaries of the rally, up only 0.84%. The company's cloud revenue surged 151% YoY while multi-cloud database revenue grew 353% YoY.

Oracle has a $638B cloud backlog, indicating strong, contracted demand. Analysts are bullish on Oracle, with several firms maintaining an Outperform rating. However, the stock is down 54.8% from its 52-week high. The October Investor Day will be a key catalyst, as management aims to showcase its AI strategy. Broadcom (AVGO) designs AI accelerators for Meta and Google, and its VMware division is positioning for private cloud AI deployments.

Analysts rate Broadcom as a solid infrastructure pick for the AI era, but the stock is off 27% from its 52-week high with an oversold RSI. Broadcom's AI revenue heavily relies on a few hyperscaler clients.