DeepSeek just took the market by storm, launching a large-language artificial intelligence (AI) model very similar to OpenAI's ChatGPT but at a fraction of the development cost, at least according to the Chinese start-up behind the technology. DeepSeek's mobile app has already been downloaded by millions, surpassing ChatGPT's download volumes across several major platforms.
And yet in many ways, the AI revolution has just begun. And there are two stocks primed to benefit regardless of whether ChatGPT or DeepSeek ultimately reign supreme.
NASDAQ: NVDA
Key Data Points
This is still the No. 1 AI stock
If you've been following the ongoing AI craze, you're likely already familiar with Nvidia (NVDA +2.59%). The chipmaker's stock price has soared in recent years, with its market capitalization now totaling several trillion dollars. And while many investors have looked elsewhere for less popular AI stock picks, there's one major reason why Nvidia still belongs in nearly every AI investor's portfolio.
Nearly every AI company in existence today is made possible, at least in part, due to Nvidia's products. Its H100 chips were considered a breakthrough in GPU manufacturing, making it significantly more efficient to train and run AI models like ChatGPT and DALLE, which require huge amounts of data and thus computational power. According to a 2022 article from Forbes, H100 chips "shattered" machine learning benchmarks when it came to training AI models.
Nvidia has been able to use its early lead in AI GPUs to attract a strong developer ecosystem as well as market-leading revenue, which it has been able to reinvest to maintain its market share, estimated to be between 70% and 95%. The company's upcoming Blackwell chips are expected to be even more powerful with notably smaller energy demands -- a huge bonus considering how energy-intensive the AI industry has become.
Suffice to say that Nvidia has carved out a powerful economic moat. The quality and reputation of its AI GPUs leads the market, providing an economic advantage it can use to not only maintain its lead, but build on it for years to come. Competitors may make breakthroughs of their own, but Nvidia's sheer financial might, as well as its near myopic focus on AI chips, will make it a difficult giant to slay.
Put simply, the AI industry needs more and more GPUs on a near daily basis, and Nvidia is the undisputed leading supplier. If you're betting on AI, Nvidia should be a part of your portfolio. But don't forget other critical suppliers like the company below.
NVDA Revenue (TTM) data by YCharts
This company could be the biggest beneficiary of AI spending
There's an age-old saying that during a gold rush, sell pickaxes. The morale here is simple: If you're supplying a craze with critical components, you'll still make money even if the craze proves short-lived or ephemeral. Nvidia certainly fits this bill. AI companies need GPUs to survive, and Nvidia is by and large the best supplier right now.
The same is true for data center businesses like Microsoft's (MSFT 0.60%) intelligent cloud segment. While many associate Microsoft with PCs and Office products, the company has really evolved into a cloud computing business. Last quarter, Microsoft generated sales of $65.6 billion. Its Intelligent Cloud segment generated $38.9 billion of that sum -- roughly 60%. Microsoft expects to spend $80 billion this year building out even more cloud compute infrastructure, a huge chunk of which should go to power AI services and platforms.
NASDAQ: MSFT
Key Data Points
AI companies need GPUs to function, but they also need cloud infrastructure. In particular, they need fast and efficient cloud infrastructure that is scaled globally, allowing their products to function economically, connecting to customers and other data centers around the world. Controlling roughly 25% of the cloud compute market globally, Microsoft is in a prime position to benefit directly from the AI revolution, with the financial backing necessary to match the AI industry's growth rates.
We've already seen some huge bombshells in 2025 when it comes AI capabilities and adoption. The recent DeepSeek news should be just the beginning, with Nvidia and Microsoft remaining positioned to be long-term winners.
