Artificial intelligence (AI) is a game-changing technology with the potential to disrupt industries and deliver massive productivity gains. While companies like OpenAI and Anthropic, which develop top-tier AI models, generate a lot of headlines, there are plenty of publicly traded companies successfully riding the AI wave as well. Two prime examples are Oracle (ORCL -1.35%) and Taiwan Semiconductor Manufacturing (TSM 1.32%), both of which look like great AI bets.
Image source: Getty Images.
Booming cloud-computing growth
As Amazon Web Services (AWS) and Microsoft Azure became the top two players in the public cloud-computing market, Oracle was largely left out. However, soaring demand for AI computing capacity has changed the story. Oracle has been rapidly building out AI-enabled data centers, and the results have been impressive.
Oracle's cloud-infrastructure revenue surged by 52% year over year in the final quarter of fiscal 2025 to $3 billion. That's still small relative to the market leaders, but Oracle is growing much faster. Amazingly, growth is set to accelerate. Oracle expects cloud-infrastructure revenue to grow by more than 70% in fiscal 2026 as more data centers come online and its infrastructure investments pay off.
The cloud-infrastructure business is now large enough that Oracle's overall revenue growth is likely to accelerate in fiscal 2026 thanks to that blockbuster growth. Revenue was up 8% in fiscal 2025 to $57.4 billion, and it should accelerate to double digits in fiscal 2026.
Beyond cloud infrastructure, Oracle's cloud-software business is also growing swiftly. Overall, cloud-application revenue rose by 12% in the fourth quarter to $3.7 billion, with both Fusion Cloud ERP and NetSuite Cloud ERP reaching the $1 billion market. This is offsetting lower on-premise software license revenue and weaker growth in hardware and services.
Oracle has undoubtedly found its niche in the cloud-infrastructure market, and it's aggressively building out more capacity to meet demand. As long as the AI boom continues, Oracle is set to be an unlikely AI winner.
The AI chip king
Essentially, all the AI accelerators powering the AI revolution, from Nvidia, AMD, and others, are manufactured by TSMC. As tech giants increasingly design their own AI chips, TSMC is the manufacturer of choice. For the first five months of 2025, TSMC's revenue has risen by more than 42% year over year as demand for AI chips soars.
TSMC is pouring capital into new manufacturing facilities. The company is planning a total investment in U.S. facilities of $165 billion over multiple years, which will involve multiple new fabs, new advanced packaging facilities, and an R&D center. In 2025 alone, TSMC's global capital spending is expected to be as high as $42 billion. These investments will support the company's upcoming process technologies, including its 2nm-class N2 process and the A16 process slated for 2026.
There's certainly some competition brewing. Intel has made some noise with its 18A process, which delivers large improvements over older processes and should be competitive with what TSMC has to offer. However, Intel has struggled to win external foundry customers and has delayed multiple new facilities amid its financial struggles. Intel could win some AI chip orders, but TSMC will almost certainly remain the top dog in foundry business for the foreseeable future.
AMD believes the AI chip market will expand to $500 billion by 2028. If that estimate is even close to accurate, TSMC will be a major beneficiary. Being based in Taiwan does introduce some risks for investors given recent developments in U.S. trade policy, but the company is well positioned to continue riding the AI wave to much higher revenue over the next few years.
