The semiconductor industry is the beating heart of the artificial intelligence (AI) revolution. Developing AI models wouldn't be possible without powerful chips and advanced networking equipment, and for them to continue getting "smarter," semiconductor suppliers will have to deliver more and more computing capacity.
For that reason, Nvidia (NVDA +1.68%) CEO Jensen Huang expects data center operators to spend up to $4 trillion on upgrading their infrastructure to meet demand from AI developers by 2030. Nvidia will be a major beneficiary of that spending over the next five years, but so will many of its peers and competitors.
Here are five semiconductor stocks to buy right now.
Image source: Getty Images.
1. Nvidia
Let's start with the most obvious pick. Nvidia's graphics processing units (GPUs) for data centers are the gold standard for AI development. The company just started shipping a new GPU called the GB300, which is based on its Blackwell Ultra architecture, and it's up to 50 times more powerful in certain configurations than its flagship H100 chip, which dominated the market in 2023 and most of 2024.
The latest AI reasoning models consume significantly more tokens (words and symbols) than older one-shot large language models (LLMs), because they spend more time "thinking" in the background to weed out errors before generating outputs. This calls for more computing power, which is expected to drive explosive demand for the GB300 from the best AI developers like OpenAI, Anthropic, Meta Platforms, and xAI.
Nvidia generated a record $41.1 billion in data center revenue during its fiscal 2026's second quarter (ended July 27), which was up 56% year over year. That number also grew by a staggering 1,081% compared to the same quarter in fiscal 2023, which was right before the AI revolution started gathering momentum. If AI infrastructure spending really does hit $4 trillion over the next five years, Nvidia will probably be one of the best stocks investors can own.
NASDAQ: NVDA
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2. Broadcom
Broadcom (AVGO -0.92%) supplies AI accelerators (a type of data center chip) to at least three hyperscalers, including Alphabet. These chips have become a popular alternative to GPUs because they can be customized to suit the needs of each customer, so they offer more flexibility.
Broadcom is also a top supplier of networking equipment. Its Ethernet switches regulate how fast data travels between chips and devices, and its new Tomahawk Ultra variant delivers industry-leading low latency and high throughput, which facilitates faster processing speeds with less data loss.
Broadcom's AI semiconductor revenue soared by 63% to $5.2 billion during its most recent quarter, but it might just be getting warmed up. The company says its three hyperscale customers plan to deploy over 1 million AI accelerators each in 2027, creating a $90 billion opportunity. Separately, a new mystery customer recently placed a $10 billion order for accelerators, and Wall Street is speculating it could be OpenAI.
NASDAQ: AVGO
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3. Advanced Micro Devices
Advanced Micro Devices (AMD -3.61%) supplies chips for some of the world's most popular consumer electronics, from Sony's PlayStation 5, to the infotainment systems inside Tesla's electric vehicles. However, the company is now laser-focused on catching up to chipmakers like Nvidia in the AI data center business.
AMD's latest MI350 series of GPUs are based on a new architecture called Compute DNA 4, and they are 35 times faster than its previous generation that launched less than two years ago. Next year, AMD will start shipping the MI400 series, which will be paired with specialized hardware and software systems to create a fully integrated data center rack called Helios, delivering a tenfold improvement in performance relative to the MI350 series.
This highlights how quickly AMD is progressing from a technological perspective. The company is slowly capturing market share already, but these new chips could cement its position as a real player in the data center space for the long term.
NASDAQ: AMD
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4. Micron Technology
GPUs wouldn't be as efficient without high-bandwidth memory (HBM), which stores data in a ready state to accelerate processing speeds. Simply put, more HBM capacity allows the GPU to unleash its maximum performance, which is essential in data-intensive AI workloads.
Micron Technology's (MU -2.62%) HBM3E solution for the data center offers industry-leading capacity and energy efficiency, and it's embedded in Nvidia's Blackwell Ultra GPUs and also AMD's MI350 series. But the company will raise the bar again next year with its HBM4 solution, which will offer 60% more performance and 20% less power consumption.
Simply put, investors who believe Nvidia and AMD will sell truckloads of data center GPUs over the next five years should also be bullish on Micron's business.
But it gets better, because some smaller AI workloads are slowly migrating to personal computers and smartphones, so they also require higher memory capacities. That's great news for Micron because it's a major player in those markets, too.
5. Taiwan Semiconductor Manufacturing
Finally, Taiwan Semiconductor Manufacturing (TSM +0.50%) could be the ultimate picks-and-shovels play as AI infrastructure spending ramps up. It's the world's largest semiconductor fabricator, and Nvidia, Broadcom, and AMD are just a few of its top clients.
Taiwan Semi offers unmatched expertise when it comes to manufacturing the most advanced chips. It works with the smallest nodes in the industry, so it can pack more transistors into each chip which is the key to unlocking processing power and energy efficiency. That is an ideal combination when it comes to AI GPUs.
Investors who own Taiwan Semi stock won't be too concerned about which chip giant wins the AI race, because whether it's Nvidia, Broadcom, or AMD, the demand for manufacturing capacity is only heading in one direction: up.
