The Motley Fool·2026-01-11 18:34Core Insights - Spending on AI capabilities is expected to increase significantly in 2026, with projections indicating even higher levels in 2027, benefiting companies providing AI hardware [1] - Nvidia, AMD, and Broadcom are identified as top picks in the AI hardware sector, with Nvidia leading the market [2] Nvidia - Nvidia has been the leader in AI infrastructure since 2023, recognized for its superior graphics processing units (GPUs) and supporting technologies, which have contributed to its status as the largest company by market cap [3] - The company recently introduced its Rubin platform, aimed at advancing generative AI, which is expected to drive future growth [4] - For fiscal year 2027, Nvidia is projected to achieve 50% revenue growth, with global data center capital expenditures anticipated to reach $3 trillion to $4 trillion annually by 2030 [5] AMD - AMD has not matched Nvidia's success in AI but is positioned to benefit from Nvidia's supply constraints, as AI hyperscalers may turn to AMD for cloud GPUs [6] - AMD's software, ROCm, has seen a tenfold increase in downloads year over year, indicating growing interest and potential for explosive growth [7] - Over the next five years, AMD expects a 60% compounded annual growth rate (CAGR) in its data center division, with an overall growth rate of approximately 35% [9] Broadcom - Broadcom focuses on designing application-specific integrated circuit (ASIC) chips, which are tailored for specific workloads, contrasting with the broader-purpose GPUs from Nvidia and AMD [10] - The company has several customers launching new computing units, anticipating a 100% surge in AI semiconductor revenue next quarter [12] - Broadcom is considered a strong alternative to Nvidia and AMD, expected to deliver significant growth in the coming years [13]