Just when some were thinking the artificial intelligence (AI) trade was dead, Nvidia (NVDA +1.08%) and other big tech stocks knocked their earnings reports out of the park. The fact is that investment in AI technology, data centers, and other infrastructure is booming with no end in sight.
Just last week, Amazon (AMZN +1.70%) announced plans to invest another $10 billion in new data centers in North Carolina. Big Tech companies are expected to spend $325 billion this year, a significant increase over the $223 billion invested in 2024. Far from being over, investment in AI is just getting started.
NASDAQ: NVDA
Key Data Points
As you can see below, the AI market is poised to experience significant growth through the end of the decade, and likely well beyond.
Statista
Here are two companies every tech investor should have on their radar.
Nvidia is still king
Nvidia's graphics processing units (GPUs) are critical infrastructure for data centers, and the big tech companies are battling to acquire as many as possible. For example, Elon Musk's xAI supercomputer initially started with 100,000 units, doubled this number to 200,000, and rumors suggest it plans to grow to 1,000,000 units in the future.
Projects like the one mentioned above for Amazon also require untold thousands of GPUs, and there are many of these projects in progress across the U.S. and the world. The incredible demand is not slacking and is the reason that Nvidia's results continue to dazzle.
Image source: Getty Images.
Nvidia's data center revenue grew 73% year over year in the recently announced fiscal first quarter of 2026, reaching $39 billion, while total sales increased to $44 billion, representing 69% growth. As shown below, Nvidia's revenue and cash flow growth over the last few years is nothing short of incredible.
NVDA Revenue (TTM) data by YCharts
There is no indication that the growth won't continue in earnest. Nvidia expects $45 billion in sales for Q2 of fiscal 2026, representing a 50% year-over-year increase. The percentages decrease due to the laws of larger numbers; however, Nvidia will add $15 billion in total sales from Q2 of fiscal 2025 to Q2 of fiscal 2026 by achieving its target.
Nvidia stock currently trades with a price-to-earnings ratio of 46, well below its three-year average of 80. This drops to just 34 on a forward basis. While the exponential gains of the last few years may be over, Nvidia stock will still likely outpace the market, given the high demand for its products and its superior growth rate.
Don't sleep on Amazon's prospects
Pop quiz, investors. What is the biggest challenge that AI faces? If you said managing, processing, and securing data, you are correct! In fact, as shown below, all of the largest challenges center around data in one form or another.
Statista
This means that cloud providers, like Amazon Web Services (AWS), the largest cloud services provider on Earth, have massive growth runways as AI adopters seek data services. AWS is the straw that stirs Amazon's drink, as it accounts for the majority of its profits. In Q1, AWS provided 63% of Amazon's $18.4 billion in operating profits. Sales reached $29 billion, driven by robust 17% year-over-year growth, and the operating margin was impressive at 39%, demonstrating that AWS has excellent pricing power.
NASDAQ: AMZN
Key Data Points
Amazon's other revenue streams also posted strong results. Digital advertising stood out with 19% year-over-year growth to $14 billion in Q1 sales. Overall, Amazon achieved 9% total sales growth, with total revenue reaching $156 billion. Net income increased to $17 billion from $10 billion in the same period last year.
The results are simply too good to be ignored. Amazon stock is historically undervalued, despite its stock price being on a general upward trajectory, as shown below.
AWS will thrive in the age of artificial intelligence, and so will Amazon. This appears to be an excellent opportunity for investors to purchase shares that are at least fairly valued, and possibly undervalued.
The AI industry is growing rapidly, and these industry titans will continue to benefit tremendously. Economic policy, such as tariffs, remains a wild card that investors should keep an eye on; however, the economy is proving quite resilient, and companies like Nvidia and Amazon are excellent long-term investments that will appreciate long after the tariff drama has run its course.
