Quiet Giants & Mega-Caps: Top 8 Stocks to Buy in September
Balancing AI infrastructure growth with value to beat the index without chasing hype.
Quick Takeaways
- AppLovin up 2,000% in three years; 70% YTD—quiet compounding beats hype.
- Vertiv Q2 revenue $2.6B, up 35% YoY; backlog $7.9B.
- Arista Q2 revenue $2.2B, up 30% YoY; gross margin >60%.
- ASML high-NA EUV tools process ~60% more wafers/day—sticky service revenue.
- Broadcom AI chip/networking revenue $5.2B, up 63% YoY; backlog $110B.
- Super Micro shipping up to 5,000 AI racks/month; liquid-cooled by default.
- TSMC controls ~70% foundry share; CoWoS capacity a key bottleneck.
- Alphabet at ~23x earnings; FCF yield ~4.5%—durable growth at a discount.
- MongoDB revenue up 24% YoY; Atlas up 29% YoY—watch for margin inflection.
Vertiv (VRT)
Liquid cooling & high-efficiency power systems enabling dense AI racks; PEG ~0.8 offers growth-at-a-reasonable-price.
- Q2 revenue $2.6B (+35% YoY)
- Backlog $7.9B; cooling market set to more than double by 2030
Arista Networks (ANET)
Ethernet’s AI moment; EOS Smart AI turns Ethernet into AI-grade fabric.
- Q2 revenue $2.2B (+30% YoY)
- Gross margin >60%; 800G shipping, path to 1.6T
ASML (ASML)
High-NA EUV is the tollbooth for next-gen chips; services/upgrade flywheel.
- Throughput ~+60% vs prior EUV gen
- Installed base expansion = recurring cash flows
Broadcom (AVGO)
AI networking + custom accelerators + VMware software = diversified AI cash engine.
- AI chip & networking $5.2B (+63% YoY)
- Backlog ~$110B; Jericho 4 & Tomahawk Ultra cycles
Super Micro (SMCI)
Rack-scale integrator with speed moat; Blackwell-class liquid-cooled racks.
- Capacity ~5,000 racks/month (2,000 liquid-cooled)
- Q4 FY25 revenue +25% QoQ
Taiwan Semiconductor (TSMC)
Dominant foundry & packaging (CoWoS) capacity; pricing power intact.
- 3nm ~24% of wafer revenue; 2nm roadmap 2026
- Aug revenue +33.8% YoY; YTD >37%
Alphabet (GOOGL)
Under-valued mega-cap growth with 4.5% FCF yield; diversified AI leverage.
- Trades ~23x earnings (below 5-yr median and peers)
- Search, Cloud, YouTube compounding
MongoDB (MDB)
Atlas simplifies AI app data; watch for sustained margin turn to trigger re-rating.
- Revenue $591M (+24% YoY)
- Atlas +29% YoY; tight hyperscaler integrations
Strategy & Catalysts
Playbook: Pair under-the-radar growth (Vertiv, Arista, Super Micro) with durable toll booths (ASML, TSMC) and cash-rich mega-caps (Alphabet, Broadcom). Keep optionality with a data-layer compounder (MongoDB).
- Macro: Sticky inflation > higher for longer; a later pivot could re-rate both mega-caps and small caps.
- Earnings tape: Data-center suppliers’ prints and orders are the near-term truth serum.
- Tech cycle: Ethernet AI fabrics, high-NA EUV rollout, Blackwell shipments, CoWoS throughput.
- Risk: Supply bottlenecks (packaging, HBM), enterprise spend digestion, geopolitics.
Disclosure & Notes
This report is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Figures are drawn from company commentary referenced in your source script and may be rounded.