With all of the money being spent on AI buildout, investors need to position their portfolio to invest in companies that are directly benefiting from this development. The obvious winner is Nvidia (NVDA 3.62%), and I think it's an excellent stock to buy now and hold for the long term.
However, Nvidia isn't the only company that's benefiting from this trend. Three others that I think look like excellent stocks to buy now include Taiwan Semiconductor Manufacturing (TSM 2.90%), Broadcom (AVGO 4.42%), and Alphabet (GOOG 3.02%) (GOOGL 2.94%).
All of these stocks look like fantastic options to buy now and hold for the long term, and investors will be rewarded if they do.
Image source: Getty Images.
The AI buildout is going strong
Although 2025 was a record-setting year for artificial intelligence infrastructure buildout, we're just getting started. Many of the AI hyperscalers have announced 2026 capital expenditure plans, and all of them have told investors to expect 2026's total to exceed 2025's total. That's bullish for infrastructure plays like Nvidia, Broadcom, and Taiwan Semiconductor.
Nvidia makes graphics processing units (GPUs), which are the computing backbone behind most of the AI technology we experience today. Its GPUs are the gold standard and have been widely deployed by nearly every AI hyperscaler to run workloads.
NASDAQ: NVDA
Key Data Points
Broadcom makes an alternative to Nvidia's GPUs, which are called custom AI accelerators. Nvidia's GPUs are the most flexible accelerated computing units in the world, and can handle a wide variety of workloads. However, most GPUs deployed in a data center only see one type of workload during their lifespan. If a chip could be tailored to that workload it sees, it could result in better performance at a lower cost point.
This concept is exactly what Broadcom ran with, and has partnered with several AI hyperscalers to build their own custom AI chip. While Broadcom won't replace Nvidia GPUs entirely (some clients still love the flexibility that GPUs offer), it's a growing segment that will challenge Nvidia in the years to come.
Neither Nvidia nor Broadcom can produce their own chips, so they farm out that work to a chip foundry like Taiwan Semiconductor. Known as TSMC, it is the world's largest chip foundry by revenue, and responsible for making most of the advanced chips that are utilized today. Regardless of whether Nvidia, Broadcom, or a different competitor wins the next generation of AI computing hardware, TSMC's chips are almost certain to be used. This allows TSMC to benefit from any AI spending, making it an excellent stock to buy now and hold for the long term.
NYSE: TSM
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These three are all infrastructure plays, which are directly benefiting from the massive amount of money being spent on AI. Alphabet is one of those companies spending hundreds of billions of dollars on AI data centers, so why is it a good buy now?
Alphabet is capitalizing on another AI infrastructure play
While Alphabet is spending billions on its AI infrastructure, it isn't doing it solely for internal purposes. Instead, it's building a lot of its capacity to be used in the cloud computing realm. Most companies don't have the ability to construct their own data center, so they rent computing capacity from a cloud provider like Google Cloud. Demand for cloud computing is at an all-time high and rapidly growing, so Alphabet must spend money in order to make money in this arena.
NASDAQ: GOOGL
Key Data Points
We're already seeing this pay off, as Google Cloud's revenue rose 34% year over year during the third quarter. The investments made today in AI infrastructure will pay off massively over the long run as these workloads are unlikely to leave Google's servers. I think this makes Alphabet a great long-term stock pick play, and it should be at the top of investors' radar to buy now and hold for the long term.
