Key Points
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Nvidia continues to dominate the AI chip market, backed by strong demand across industries.
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TSMC is a key beneficiary of the surging demand for advanced chip manufacturing capabilities.
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Microsoft and Broadcom are emerging as key enablers of AI infrastructure construction, while Palantir is gaining traction in real-world AI deployment.
- 10 stocks we like better than Nvidia ›
Technology investing has always been about identifying the next key industry trend. It is no surprise that artificial intelligence (AI) has emerged as the dominant force in today’s market, even as some investors worry that AI spending may be nearing a peak.
Those concerns are understandable after the strong stock rallies seen over the past couple of years, but the underlying opportunity remains significant. AI infrastructure spending by several of the biggest customers is expected to reach roughly $700 billion in 2026, while several large tech companies continue to report strong revenue growth in the double digits or higher tied to AI demand.
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Investors with $5,000 to spare after paying bills or meeting contingencies can consider building positions in companies that provide exposure to the hardware, cloud, and software powering AI. Here are five stocks that meet the criteria.
Nvidia
Nvidia‘s (NASDAQ: NVDA) revenue for fiscal 2026 (ending Jan. 25) surged around 65% year over year to $215.9 billion, driven largely by hyperscalers aggressively investing in data centers. CEO Jensen Huang sees a data-center AI opportunity exceeding $1 trillion through 2027, up from earlier estimates of about $500 billion. This upward revision reflects an accelerated demand for its Blackwell and Rubin systems.
Nvidia’s full-stack approach — built on a tightly integrated system spanning chips, networking, and software — has made it a crucial enabler of the global AI infrastructure building boom. According to researcher Mizuho, the company is estimated to hold more than a 75% share of the market for AI training and inference chips for data centers.
Its commitment to innovation and expanding global demand continues to support the company’s growth. Its $20 billion deal with Groq is also strengthening its position in inference workloads by adding specialized technology and engineering talent.
With strong cash generation and deep integration across the AI stack, Nvidia remains a smart long-term pick.
Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (NYSE: TSM) has become one of the clearest enablers of the AI boom. In its 2026 first quarter (ending March 31), revenue rose about 39% year over year to $35.9 billion. Gross margin expanded by 3.9 percentage points sequentially to 66.2%, highlighting the company’s strong pricing power.
AI demand is now the primary growth engine. High-performance computing accounted for 61% of total first-quarter revenue, while advanced nodes below 7-nanometer contributed 74% of wafer sales.
Management expects revenue to grow above 30% year over year in 2026. With demand for advanced nodes still exceeding supply, the company is positioned to remain a key beneficiary of the ongoing AI infrastructure build-out.
Broadcom
Broadcom (NASDAQ: AVGO) is benefiting from rising demand for custom chips, as large technology companies focus on optimizing performance and costs. The company is guiding for revenue to grow 47% year over year to around $22 billion, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be around 68% of total revenue in the second quarter of fiscal 2026.
Semiconductor sales are forecast to grow 76% year over year to $14.8 billion, driven by surging AI demand. AI semiconductor revenue is predicted to rise 140% year over year to $10.7 billion.
The company’s custom AI accelerator business is scaling up, with deployments across multiple hyperscalers and AI developers, including Alphabet, Meta Platforms, and Anthropic. Broadcom also expects to generate over $100 billion in AI-related chip revenue by 2027, supported by multiyear contracts and secured supply chains.
With strong profits and close partnerships in custom chips and networking, Broadcom is playing a key role in building the next generation of AI systems.
Microsoft
Microsoft (NASDAQ: MSFT) is quietly turning into one of the most important players in the AI boom, with its cloud platform and long-term contracts driving steady growth. Analysts expect revenue to rise roughly 16.2% year over year to $81.4 billion and earnings per share to grow 17.7% year over year to $4.07 in the third quarter of fiscal 2026.
Microsoft exited the second quarter with commercial remaining performance obligations (RPOs, a measure of contractual backlog) of $625 billion, up 110% year over year. Hence, the company has impressive revenue visibility, supported by multiyear AI contracts.
It is also focusing on monetizing its Copilot virtual AI assistant. The company had about 15 million paid Microsoft 365 Copilot seats at the end of the second quarter, highlighting its strong enterprise adoption and usage growth.
Evercore analyst Kirk Materne expects Azure AI revenue to grow around 41% year over year to nearly $25.7 billion in calendar 2026, significantly higher than its previous estimate of $21.8 billion. The analyst also forecasts Azure acceleration mostly in the second half of 2026, as data center capacity is tight and may need time to scale up.
Thanks to its impressive presence in the cloud, AI platforms, and enterprise software, Microsoft is becoming a long-term enabler of AI adoption across industries.
Palantir Technologies
Palantir Technologies (NASDAQ: PLTR) has become a key in applying AI to defense intelligence and real-world business operations.
The Pentagon’s recent decision to utilize Palantir’s Maven AI platform has ensured long-term stable funding from U.S. military budgets. Previously, the Army consolidated multiple deals into a single agreement with Palantir, valued at around $10 billion over 10 years. These contracts highlight the durability and visibility of the company’s government revenue.
Palantir is also gaining in commercial markets through its Artificial Intelligence Platform (AIP), which helps organizations derive insights by connecting AI models directly with their enterprise data and operational work flows. This is driving strong adoption across industries such as aerospace, healthcare, and energy.
Although trading at an expensive valuation of nearly 79 times forward earnings, Palantir is still an attractive pick due to its increasingly prominent role in global data-driven decision-making.
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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Broadcom, Evercore, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
