This year, the "Big Seven" stocks, including Amazon (AMZN.O), Meta Platforms (META.O), Alphabet (GOOGL.O), Microsoft (MSFT.O), NVIDIA (NVDA.O), and Apple (AAPL.O), have all surged, with an increase of nearly 3% on Wednesday. The Technology Industry ETF has set a new high 29 times this year.

Oracle (ORCL.N): Strong growth, attractive valuation.

Oracle's stock price fell by 6% to $178 after the release of its second-quarter Earnings Report this Monday. Nevertheless, its stock price has doubled since the end of 2022. This stock price decline is a natural response of the market to high expectations.

The Earnings Report shows that Oracle's future growth prospects are good. Quarterly revenue increased by 8.6% year-on-year to $14.1 billion, with cloud business revenue growing by 24% to $5.9 billion, and cloud infrastructure revenue reaching $2.4 billion. Oracle is migrating customers from traditional Data Storage to its efficient AI-supported services. Revenue growth for the upcoming third quarter is expected to be 8%, with growth reaching up to 10% after excluding Exchange Rates effects.

Oracle's cloud infrastructure business growth rate exceeds the industry average, with a future overall annual revenue growth rate expected to be maintained at over 10%. Although AI-related investments will put pressure on profit margins in the short term, Analysts estimate that its average annual EPS growth rate will reach 18% over the next four years. Currently, its PE is 27 times the expected earnings for the next 12 months, significantly lower than the average level of the American Software industry, but its growth prospects are much stronger, and its stock price has further upside potential.

Teradyne (TER.O): Dual drive by robots and chip testing.

Teradyne is a manufacturer of robots and chip testing equipment with a Market Cap of $19 billion, and its stock price has dropped about 27% from its summer peak of $163.21 to $120. Recent industrial client capital expenditure slowdown has led to a deceleration in its industrial business growth, but the long-term outlook remains optimistic.

With industrial customers resuming investments in Automation Equipment, sales in this sector are expected to recover. Meanwhile, the growing demand for AI Chips is driving an increase in chip testing equipment demand. Total revenue in the third quarter grew by 5% to $0.737 billion. Analysts expect that by the end of this century, the market size for Teradyne could reach $19 billion, with a solid industry position, facing only Tokyo's Advantest as its main competitor.

Analysts expect that by 2026, Teradyne's revenue and EPS will rise to $4.1 billion and $5.99, respectively. If the company demonstrates a strong growth trajectory, its stock price is expected to rebound. Currently, its PE is at 28 times, below this year's peak of 37 times.

AMD (AMD.O): The striver in AI Chips.

Due to AI Chip sales falling short of expectations, AMD's stock price has dropped 39% from a high of $227.30 in March to $127. However, the company recently raised its full-year revenue guidance from $4.5 billion to $5 billion.

AMD CEO Lisa Su stated that the long-term scale of the AI Chip market could exceed $500 billion. Currently, NVIDIA dominates a $100 billion market, but customers still need to diversify their supply chains, with AMD being the second-largest choice after NVIDIA.

Analysts predict that by 2027, AMD's annual sales of datacenter chips, including AI Chips, will grow by 36%, reaching $31 billion. A lower PE (26 times compared to NVIDIA's 33 times) also provides upward potential for its stock price.

The unique positioning of these three companies in the AI wave gives them long-term growth potential, making them a worthy consideration for investors who missed the surge of NVIDIA, potentially representing a 'second tier.'