There's been a lot said about the massive spending on artificial intelligence (AI) infrastructure, with Meta Platforms, Alphabet, Amazon, and Microsoft alone expected to spend a collective $700 billion this year on new data centers and the equipment that fills them, such as chips, networking equipment, server racks, and cooling systems.
But take a moment to absorb that number -- $700 billion. Fewer than 20 publicly traded companies worldwide have market caps that large. It's also more than the gross domestic products of many countries, including Israel, the United Arab Emirates, and Sweden.
Undoubtedly, there's going to be a lot of money changing hands this year and in the years to come as tech companies build out their AI data centers. If you're looking for some slam-dunk stock buying opportunities to capitalize on that trend, consider Nvidia (NVDA +0.87%), Digital Realty Trust (DLR +0.78%), and Credo Technology Group (CRDO +5.73%).
Image source: Getty Images.
Nvidia
Tech stocks have been taking it on the chin in recent weeks. The biggest reason is that some analysts are worried that companies like Meta and Alphabet are spending too much on AI infrastructure and won't be able to make money off their investments. While I understand that argument, I think that Nvidia stock is being unfairly punished.
First of all, Nvidia will continue to be arguably the biggest beneficiary of the AI buildout, as it makes the most popular processors for training models and handling high-level computing workloads. CEO Jensen Huang has projected that the AI infrastructure opportunity could be worth up to $4 trillion over the next five years, and Nvidia is positioned to get a significant portion of that through its Blackwell and Vera Rubin processors.
Revenue continues to increase at an astonishing clip. Sales in the fourth quarter of its fiscal 2026 (which ended Jan. 25) were $68.1 billion, up 73% from the previous year. Total revenue for its fiscal 2026 was $215.9 billion, an increase of 65% from fiscal 2025.
But Nvidia, which was once valued at more than $5 trillion, has lost roughly $840 billion in market capitalization as tech stocks pulled back. The stock is currently on sale, more than 16% off its all-time high, and reasonably valued with a forward price-to-earnings ratio of about 21. I'm expecting big things from Nvidia stock.
NASDAQ: NVDA
Key Data Points
Digital Realty
While Nvidia supplies the graphics processing units (GPUs) that make AI run, Digital Realty supplies data centers and connection services. The company operates more than 300 data centers across North America, Europe, Asia, and Australia, and it counts more than half of the Fortune 500 among its clients.
The company has 3 gigawatts (GW) of data center capacity currently, with another 5 GW of development capacity. It finished 2025 with $1.2 billion in full-year bookings, with a backlog of $1.4 billion.
CEO Andrew Power told analysts:
The introduction of ChatGPT a few years ago and the ensuing race between Gemini, Claude, Grok, and others marked the beginning of a new chapter in the digital age, one defined by the convergence of AI, cloud, data, and interconnection at a global scale. Cloud platforms continue to grow at remarkable rates even at their extraordinary scale, underscoring the depth and durability of this demand.
Digital Realty is a real estate investment trust, which means it is required to return at least 90% of its taxable income to shareholders as dividends every year. At the current stock price, its yield is 2.8%, providing investors with a stable source of income or an opportunity for dividend reinvestment.
NYSE: DLR
Key Data Points
Credo Technology Group
Credo Technology doesn't get the same level of attention as Nvidia, but you can argue that Nvidia's chips wouldn't be nearly as valuable without Credo's contribution. The company provides high-speed data connectivity products for data centers, as well as 5G products and high-performance computing. Its active electrical cables (AECs) use signal processors to help move data quickly between chips and switches, reducing degradation and power consumption.
The company is growing even faster than Nvidia. Revenue in its fiscal 2026 third quarter (which ended Jan. 31) was up 201.5% from a year ago to $407 million. Credo ended the quarter with $1.3 billion in cash, thanks in part to gross margins of 68.5%. Revenue in the current quarter is forecast to be in the range of $425 million to $435 million.
