Artificial intelligence (AI) is one of those transformational technologies that's hard to miss. Every technology company talks profusely about it on its earnings calls, and if any one of them is behind its competitors, none admits it.
That's because there's a lot at stake. PwC estimates that AI could be worth $15.7 trillion by 2030. With all that opportunity, there's plenty of room for winners. But an AI war is under way, and a handful of companies are already proving their mettle. Here are two to buy right now.
Image source: Getty Images.
1. A company betting (almost) all its chips on AI
Semiconductors are the brains behind AI, with the most advanced processors able to train new AI models to be smarter and more efficient. While DeepSeek's recent debut indicates that the latest and greatest chips may not always be necessary to create impressive AI models, some people have overlooked that its model allegedly used other AI models to learn from, which were trained with advanced processors.
The fact remains that the world's largest tech companies aren't going to stop buying advanced processors because one AI start-up didn't use them for its own model. Alphabet, Meta Platforms, Apple, Microsoft, and others are still shelling out billions of dollars for AI infrastructure -- and Nvidia (NVDA +2.25%) is one of the biggest recipients.
Nvidia's GPUs have been the go-to AI processors for years, and the company's latest financial results speak for themselves. For the fiscal third quarter of 2025, sales rose 94% to $35.1 billion, and earnings soared 103% to $0.81 per share. That growth was fueled by Nvidia's data center segment, with revenue more than doubling to $30.8 billion.
Is it possible for Nvidia to grow more after this? It's entirely possible. Nvidia CEO Jensen Huang believes that spending on AI data centers could reach $2 trillion over the next five years. He could be overshooting the estimate, of course, but keep in mind Microsoft just said it'll spend $80 billion in 2025 alone to continue building out its data centers. Oh, and ChatGPT creator OpenAI, Oracle, and Softbank recently said they'll spend $500 billion over the next four years to build new AI data centers, too.
NASDAQ: NVDA
Key Data Points
These investments will bode well for Nvidia's processor business and could help the company's stock continue its success. Its share price may not be as expensive as you think, either, with a forward price-to-earnings ratio of 29.1, only slightly more expensive than the S&P 500 index's forward P/E of 24.
2. The best semiconductor manufacturing play
If you believe that AI processor demand is soaring (and it is) and that it could continue to do so as tech companies invest billions of dollars to build data centers, then it follows that demand could skyrocket at a company that makes the processors.
Enter Taiwan Semiconductor Manufacturing (TSM 1.75%). The company, also known as TSMC, has a corner on the advanced processor manufacturing space, holding an estimated 90% of the market. That means as Nvidia and other chipmakers sell their processors to tech giants who need bigger AI data centers, TSMC ramps up its machines to churn them out.
NYSE: TSM
Key Data Points
TSMC is already reaping the benefits of this increasing demand. In the fourth quarter, the company's revenue jumped 37% to $26.8 billion, and earnings jumped by 57% to $2.24 per ADR unit.
Even TSMC's CEO, C.C. Wei, sounded surprised by all of this chip demand on the latest earnings call, saying, "Even after more than tripling in 2024, we forecast our revenue from AI accelerators to double in 2025 as the strong surge in AI-related demand continues," Wei said.
Taiwan Semiconductor's share price has surged alongside AI chip demand, yet its stock is still relatively inexpensive. Its shares have a forward P/E of just 23.6, on par with the S&P 500's. This means you can buy this AI stock for a relatively good price just as the company fires up its machines to produce more AI processors for the world's most advanced tech companies. That sure seems like a no-brainer buy to me.
