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Semiconductor companies have been among the biggest beneficiaries of the massive AI data center build-out over the last few years. Companies like Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) are at the center of the industry, with their leading AI accelerator chips. Other chipmakers specializing in memory or networking chips have also seen profits soar and their stock prices rise.
And the incredible growth could continue for years to come. PwC expects total capital expenditures for data centers to climb from $800 billion this year to $1.8 trillion by 2050. More importantly, it's how that spending will be allocated that makes that estimate so bullish for semiconductor stocks. Amazon (NASDAQ: AMZN) CEO Andy Jassy explained on the company's most recent earnings call that spending will shift toward more semiconductors, suggesting there's a lot of room for revenue growth in semiconductor stocks.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
But Nvidia and Broadcom might not be the best semiconductor stocks right now. Another industry giant could be an even better opportunity to play the long-term growth potential in chips.