Nasdaq’s AI Boom Is Coming: 2 Must-Buy Stocks Wall Street Is Betting On

Tech’s hottest trend is about to send the Nasdaq soaring—again. History doesn’t lie. And this time, AI is driving the rally.

Here’s the playbook: two stocks Wall Street’s whispering about. No fluff, no hype—just the names smart money’s piling into.

Why now? Because while Main Street debates ‘bubbles,’ hedge funds are already positioning for the next leg up. Classic.

Image source: Getty Images.

1. Arm Holdings

Arm is a British semiconductor company that designs central processing units (CPUs) and related software and systems development tools. Rather than selling chips, Arm develops and licenses CPU architectures to other companies, which use the intellectual property to create custom chips across end markets like mobile devices, data center servers, and automotive systems.

Importantly, Arm has traditionally been known for its power-efficient architecture, a quality that has led to dominance in the smartphone market. But the company has more recently gained market share in data center servers due to adoption by companies like,,, and. In fact, the number of companies that use Arm-based chips in data centers has increased 14-fold since 2021.

Arm reported mixed results in the June quarter, missing expectations on the top line. Total sales increased 12% to $1 billion due to strong growth in royalty revenue offset by a decline in licensing revenue. Operating margin contracted 8 percentage points due to an increase in R&D spending, and non-GAAP (generally accepted accounting principles) net income declined 13% to $0.35 per diluted share.

However, management gave encouraging guidance for the September quarter: Sales will increase 26%, and non-GAAP earnings will increase 10%. CFO Jason Child told analysts, "We have high confidence in healthy growth in the coming year and in years to come." He said the confidence stems in part from rising demand for custom AI chips.

Wall Street expects Arm's adjusted earnings to increase at 24% annually through the fiscal year ending in March 2027. That makes the current valuation of 88 times adjusted earnings look pricey. But I think Arm will grow more quickly as the AI infrastructure build-out creates demand for custom, power-efficient server chips. Also, the company beat the consensus earnings estimate by an average of 9% in the last four quarters.

2. MongoDB

MongoDB develops document-oriented database software. The document model is more flexible and scalable than traditional relational databases (i.e., SQL databases), which only store structured information in rows and columns. By comparison, document databases can also store large amounts of unstructured data like text, photos, and videos.

MongoDB is particularly well suited to analytics, content management, e-commerce, video games, and payments applications. Also, its vector search capabilities -- vector search relies on semantic meaning, whereas traditional search relies on exact matches -- make it a good option for generative AI applications.

Last year, MongoDB introduced MAAP (MongoDB AI Application Program), a collection of reference architectures and resources that help developers enrich their applications with artificial intelligence features. And earlier this year, MongoDB acquired Voyage AI, which develops embedding and reranking models that make AI applications more accurate.

CEO Dev Ittycheria recently told analysts: "MongoDB now brings together three things that modern AI-powered applications need: real-time data, powerful search, and smart retrieval. By combining these into one platform, we make it dramatically easier for developers to build intelligent, responsive apps without stitching together multiple systems."

Grand View Research expects the database management systems (DBMS) market to grow 13% annually through 2030. Consultancyhas recognized MongoDB as a leader in DBMS for the last three years, and it is the most popular document database on the market by a wide margin. That should translate into above-average growth in the years ahead, which makes the current valuation of 8.5 times sales look quite reasonable, especially when the three-year average is 12.9 times sales.