Artificial intelligence (AI) stocks have been hit hard in recent weeks. The market is growing skeptical about AI spending, but the reality is that it's still going strong. We've received news of what capital expenditures look like for many of the AI hyperscalers during 2026, and these record-setting numbers indicate one thing: The AI buildout is far from over.
This makes me bullish on a specific group of stocks, including Nvidia (NVDA +0.29%) and Broadcom (AVGO +2.21%). Both of these companies are poised to benefit from the massive amount of money being spent this year, and look like excellent buys right now as a result.
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How much is being spent on AI?
The three companies I want to focus on for capital expenditures spending amounts are Amazon, Alphabet, and Meta Platforms. All three of these companies are AI hyperscalers and are spending a ton on computing equipment for internal use and to rent out to customers via their cloud computing service.
For 2026, Amazon expects to spend $200 billion, Alphabet up to $185 billion, and Meta up to $135 billion. Combined, that's over $500 billion in capital expenditures. That's not including Microsoft, which is a major spender as well.
There are also several other companies spending billions of dollars on computing equipment that aren't even included on this list, so the reality is that AI spending is going to be as big as ever. While investors may be concerned that companies are spending too much on AI and should be concerned, that doesn't mean you should avoid investing in companies that are making money from AI right now, like Nvidia and Broadcom. Both of these are major computing unit suppliers and will make a boatload of money this year.
NASDAQ: NVDA
Key Data Points
Nvidia makes graphics processing units (GPUs), which have been the go-to AI computing units since the AI boom began in 2023. While Nvidia is seeing more challengers, it's still the top contender thanks to its full technology stack setup that allows end users to purchase everything they need from Nvidia.
Another company to watch is Broadcom. Instead of offering a GPU that can tackle a wide range of workloads, it's partnering directly with AI hyperscalers to design a chip specifically meant for its needs. Alphabet and Broadcom have already collaborated to produce the Tensor Processing Unit (TPU), a wildly popular design. As Alphabet's capital expenditures soar, so will its TPU orders, boosting Broadcom's sales.
There are also several other hyperscalers who are clients of Broadcom's, and each of them also expects to ramp up consumption of custom AI chips in an effort to diversify away from Nvidia's products.
NASDAQ: AVGO
Key Data Points
Each of these compaines is slated to benefit, but they're also just great buys in general right now.
These stocks rarely trade at these cheap valuations
Wall Street analysts expect both Broadcom and Nvidia to deliver 52% revenue growth this fiscal year. That clearly indicates that the AI boom is far from over, yet the market isn't pricing in this success.
NVDA PE Ratio (Forward) data by YCharts
Nvidia is the cheaper of the two, trading for 24 times forward earnings. Broadcom is more expensive at 32 times forward earnings, but its success is far less predictable than Nvidia's due to its concentration with a handful of clients using its chip designs. I still think each of these AI stocks is worth investing in, although I do prefer Nvidia a tad more.
With the massive amount of money being spent on AI hardware from these three major players, Nvidia and Broadcom's stock should be rising, not falling. But that opposite is going on, so investors should use this opportunity to load up on two of the best growth stocks we've seen in years.
