Artificial intelligence (AI) infrastructure stocks continue to drive this market, and with spending expected to ramp up even further in the coming years, there is no reason to think that these stocks can't continue to outperform over the long term.
Let's look at two AI infrastructure stocks that might be worth a closer look now as a great long-term investment.
1. Advanced Micro Devices
While Advanced Micro Devices (AMD 0.56%) is the distant No. 2 player in the graphics processing unit (GPU) space to Nvidia, it may have more upside over the long run. The biggest reason for this is that its data center revenue base is just so much smaller, which could allow it to grow faster than the market leader.
Image source: Getty Images.
At its recent analyst day, AMD management said it sees its total addressable market, which includes not only GPUs, but also central processing units (CPUs), memory, and networking components, hitting $1 trillion by 2030, which was up from an earlier prediction of $500 billion. As a result, it thinks it can grow revenue at a more than 35% compound annual growth rate (CAGR) and its data center revenue at a greater than 60% CAGR. As such, it thinks it can produce over $20 in adjusted earnings per share (EPS) in the coming years.
The company is looking to up its game in the GPU data center market with the introduction of its Helios rack server, which will include its new Instinct MI450 Series GPUs, in Q3 of 2026. It will follow that with the launch of its MI500 Series in 2027, as it quickens its pace of development. At the same time, AMD remains the leader in data center CPUs, and it expects its market share to rise to over 50% in this area.
NASDAQ: AMD
Key Data Points
Meanwhile, it has been reported that Microsoft has been working to develop toolkits to convert Nvidia's CUDA models to AMD's ROCm code in order to use more AMD chips for inference. That would be a big win for the company that likely isn't in these numbers. It also recently partnered with OpenAI, which took a 10% stake in AMD, where the AI model maker will deploy 6 gigawatts of its GPUs in the coming years.
Taken as a whole, AMD has a significant growth opportunity ahead, making the stock a buy.
2. Broadcom
Broadcom (AVGO +0.73%) is another company that has a big AI infrastructure opportunity in front of it. With the data center buildout, it's seen strong demand for its networking components, which are essential for helping move massive amounts of data quickly and efficiently in data centers. However, its biggest opportunity moving forward is in helping customers design custom ASICs (application-specific integrated circuits) for AI workloads.
As companies continue to look for cheaper alternatives to Nvidia, one option is to turn to custom silicon. ASICs are purpose-built for specific tasks and cannot be reprogrammed, but they can provide better performance and be more efficient at the tasks for which they were made. Broadcom helped Alphabet design its renowned tensor processor units (TPUs), which have led to other hyperscalers seeking out its services.
NASDAQ: AVGO
Key Data Points
It noted that its three customers the furthest along could be a $60 billion to $90 billion market opportunity in its fiscal 2027, which could be more than double its current revenue base. Meanwhile, a fourth customer placed a $10 billion order for next year, and it just signed a 10-gigawatt deal with OpenAI. One gigawatt of power can translate into approximately $35 billion in chips, so this is a huge deal.
With all these recent customer wins, Broadcom should see huge growth in the coming years. That makes it a stock you want to buy and hold for the long term.
