The artificial intelligence (AI) market has grown rapidly over the past decade, with the development of more powerful chips and more advanced algorithms. New generative AI platforms such as OpenAI's ChatGPT also introduced AI to mainstream users.
That AI boom isn't over yet. According to Grand View Research, the global AI market could expand at a compound annual growth rate of 36.6% from 2024 to 2030 as more industries optimize their businesses with AI technologies.
Image source: Getty Images.
But with so many AI stocks, it can be tough to separate the winners from the losers. Let's discuss three resilient blue-chip stocks that could easily profit from the AI market's secular expansion over the next decade: Nvidia (NVDA +2.59%), Broadcom (AVGO +4.69%), and Taiwan Semiconductor Manufacturing (TSM +1.40%).
1. Nvidia
Nvidia is the world's largest producer of discrete graphics processing units (GPUs). These chips were once mainly used for gaming and professional visualization applications, but they're now widely used in data centers to process complex machine learning and AI tasks. All of the world's top AI companies, including OpenAI and Microsoft (MSFT 0.60%), use its chips.
Unlike central processing units, which process a single piece of data at a time, GPUs can process a wide range of integers and floating point numbers simultaneously. That efficiency makes them the picks and shovels of the AI gold rush, and Nvidia's first-mover advantage in that space gives it a massive advantage against its smaller competitors.
NASDAQ: NVDA
Key Data Points
In fiscal 2025, which ended in January, Nvidia's sales of data center chips surged 142% and accounted for 88% of its top line. Its total revenue soared 114%, as its adjusted earnings per share (EPS) jumped 130%. For fiscal 2026, analysts expect its revenue and adjusted EPS to grow another 56% and 50%, respectively, as the AI boom continues.
Nvidia's stock has already soared nearly 1,600% over the past five years, but it still isn't expensive at 26 times forward earnings. Its growth will inevitably cool down over the next decade, but its stock should continue rising as the AI market expands.
2. Broadcom
Broadcom, which was known as Avago until it acquired the original Broadcom in 2016, is a diversified chipmaker and software maker. It's one of the world's largest producers of mobile, data center, networking, wireless, storage, and industrial chips. It expanded into the software market by acquiring CA Technologies, Symantec's enterprise security unit, and VMware.
Broadcom is not nearly as dependent on the AI market as Nvidia, but it sells plenty of networking, optical, and custom accelerator chips for AI-oriented data centers. Its sales of those AI chips more than tripled in fiscal 2024, which ended last November, and accounted for 24% of its top line. Its total revenue, which was boosted by its takeover of VMware, and adjusted EPS increased 44% and 15%, respectively, for the full year.
NASDAQ: AVGO
Key Data Points
For fiscal 2025, analysts expect Broadcom's revenue and adjusted EPS to rise 21% and 36%, respectively, as it fully laps its takeover of VMware. During its latest conference call, CEO Hock Tan said it saw a "massive" opportunity in the AI market "over the next three years" as its AI semiconductor business outgrows its sales of non-AI chips.
Broadcom's stock has already rallied more than 620% over the past five years, but it still looks reasonably valued at 31 times forward earnings. It should remain a well-balanced play on the growing AI and cloud markets for the foreseeable future.
3. Taiwan Semiconductor Manufacturing
Lastly, Nvidia, Broadcom, and other fabless chipmakers can't produce their top-tier chips without Taiwan Semiconductor, the world's largest and most advanced contract chipmaker. TSMC manufactures the smallest, densest, and most power-efficient chips, and it controls nearly two-thirds of the global foundry market, according to TrendForce.
In 2024, TSMC generated 51% of its revenue from the high-performance computing market, which includes Nvidia and other high-end chipmakers. Another 35% of its revenue came from the smartphone market, while the rest came from the smaller automotive, Internet of Things (IoT), and digital consumer electronics markets.
NYSE: TSM
Key Data Points
TSMC's revenue and EPS grew 30% and 40%, respectively, in 2024. Most of that growth was driven by its orders from Nvidia and other AI-oriented chipmakers.
It expects that market to stay hot as its other non-AI markets -- particularly in PCs, smartphones, and memory chips -- warm up once again. Analysts expect its revenue and EPS to grow 28% and 29%, respectively, in 2025.
TSMC's stock has risen more than 220% over the past five years, but it still doesn't look expensive at 20 times forward earnings. Its valuations are being compressed by some near-term concerns about tariffs, export curbs, and tensions between Taiwan and China, but it will remain a foundational stock of the AI market for years to come.
