Nvidia recently unveiled its new GPU architecture.
AMD can grab market share that Nvidia is conceding due to supply constraints.
Broadcom is taking a different approach to AI computing.
Spending on AI capabilities isn’t slowing down in 2026. The reality is, AI hyperscalers are planning to spend more on data centers in 2026 than they ever have before. And if projections beyond 2026 are to be believed, 2027’s levels will be even higher. This places the companies providing this hardware in a great position, and they are slated to deliver explosive growth over the next few years.
While many companies will benefit, investors don’t need to overthink this one. Some of the companies that have dominated the artificial intelligence (AI) hardware game for a long time are still top picks. Three that I’m looking at are Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and AMD (NASDAQ: AMD).
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While these three may be obvious choices, sometimes the most obvious choice is the best one.
Image source: Getty Images.
Nvidia has been the leader of the AI infrastructure buildout since it began in 2023. While it is acknowledged to have the best graphics processing units (GPUs) technology, it also has other supporting pieces, like full-stack components and controlling software, that beat out the competition. This allowed Nvidia to not only rise to the top in the AI infrastructure realm but also become the largest company in the world by market cap.
Just because Nvidia is in the lead doesn’t mean it’s backing off. Nvidia recently unveiled its Rubin platform, which is poised to take generative AI to the next level. This innovation should keep Nvidia on top but also drive future growth.
For fiscal year 2027 (ending January 2027), Wall Street expects 50% revenue growth from Nvidia. Given that Nvidia is a $4 trillion behemoth, I’d consider that explosive growth. Even further in the future, Nvidia expects global data center capital expenditures to ramp up to $3 trillion to $4 trillion annually by 2030 and Nvidia will be one of the companies at the forefront of benefiting from this explosive growth.
While Nvidia has been largely successful in its AI efforts, AMD hasn’t experienced the same success. However, that could be shifting. One notable item that came out of Nvidia’s Q3 earnings report is that it sold out of cloud GPUs. While this is great for Nvidia, it also opens the door to other suppliers like AMD. AI hyperscalers aren’t going to decrease their computing needs just because Nvidia can’t fulfill them. Instead, they may turn to a company like AMD.
AMD is already seeing a shift.
It noted in November that its software, ROCm, saw downloads increase 10 times year over year due to improvements with each release cycle. This shows that many people are exploring AMD as an alternative, and it could deliver some explosive growth as a result.
Over the next five years, AMD expects its data center division to deliver a 60% compounded annual growth rate (CAGR). Its overall growth rate will be closer to 35% due to a greater concentration on areas outside of AI, but that’s still strong growth for AMD that investors can benefit from.
AMD and Nvidia are both focused on producing GPUs, which are broad-purpose computing units. This means they can handle a wide variety of workloads but aren’t necessarily suited for a particular workload type. This makes them a bit of overkill for certain tasks that can be streamlined and run the same way each time. Broadcom is leaning into this streamlined approach and offering its design service to AI hyperscalers to help them design application-specific integrated circuit (ASIC) chips.
Broadcom already has several customers rolling out these computing units and several more launching later this year and next. This should lead to explosive growth for Broadcom, as it expects its AI semiconductor revenue to surge 100% next quarter.
Broadcom is a great alternative to Nvidia and AMD and is expected to deliver huge growth over the next few years. All three of these companies should see their growth explode higher, and I think they make for great investments in every AI investor’s portfolio.
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Keithen Drury has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
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