Key Points AMD's new partnership with OpenAI allows it to purchase up to 6 gigawatts of computing power. OpenAI also has a deal with Nvidia to provide 10 gigawatts of computing power. AMD's stock is far more expensive than Nvidia's after the announcement. 10 stocks we like better than Advanced Micro Devices › AMD's (NASDAQ: AMD) deal with OpenAI has shaken up the artificial intelligence (AI) investing landscape. The terms of the deal are unique, as AMD is essentially providing OpenAI with chips in ...

Key Points Most designers of AI computing hardware utilize TSMC's foundries. TSMC is rolling out new chip manufacturing technology that could provide massive efficiency gains for data center operators. TSMC's stock trades at a much lower valuation than its chip design clients. 10 stocks we like better than Taiwan Semiconductor Manufacturing › It's impossible to ignore the massive AI infrastructure deals that have been announced recently. Many of these agreements will cover multiple years of hardw ...

Group 1: Broadcom - Broadcom is positioned as a competitor to Nvidia, focusing on partnerships with AI hyperscalers to design custom AI accelerator chips rather than duplicating Nvidia's GPUs [3][6] - In Q3 fiscal year 2025, Broadcom's AI revenue increased by 63% year over year to $5.2 billion, with expectations for further growth to $6.2 billion in Q4 [5] - Broadcom's total revenue for Q3 was nearly $16 billion, indicating that while AI is a fast-growing segment, other business units remain larger [5] Group 2: Taiwan Semiconductor - Taiwan Semiconductor (TSMC) is the leading chip production facility, providing services to both Nvidia and Broadcom, and is known for continuous innovation and high yields [7][9] - TSMC is set to launch its 2-nanometer chip node, which will consume 25% to 30% less power than the 3nm node, potentially reducing input costs significantly [8] - In Q2, TSMC's revenue rose by 44% year over year in U.S. dollars, with expectations for sustained growth as the AI computing market expands [10]

Core Insights - Major American companies, including Microsoft and OpenAI, are committing over £31 billion ($42.3 billion) to technology infrastructure in the UK, coinciding with President Trump's visit [2][3] - The UK government is facilitating this investment by fast-tracking planning approvals for data centers and creating an AI Growth Zone to stimulate job creation [3][4] Company Investments - Microsoft plans to invest $30 billion over four years in AI infrastructure in the UK, marking its largest financial commitment to the country [6] - OpenAI is central to a $500 billion Stargate AI infrastructure project, with plans to utilize up to 31,000 Nvidia Blackwell semiconductors in the UK [5][6] - Nvidia is investing £11 billion in AI data centers in the UK, aiming to deploy 120,000 AI accelerator chips by 2026 [6] - CoreWeave is set to invest £1.5 billion in a renewable energy-powered data center in the UK, in addition to its existing £1 billion investment [6] - Salesforce is extending its investment in the UK by an additional $2 billion through 2030, building on a previous $4 billion commitment [6] - Alphabet Inc.'s Google plans to invest £5 billion over two years, including a new data center in Hertfordshire [6] - BlackRock is investing £500 million into data centers in the UK [6] Industry Trends - The UK is joining a global trend towards building local artificial intelligence infrastructure, referred to as sovereign AI, which is seen as crucial for future growth by companies like Nvidia [7][8] - Nvidia's CEO has indicated that the sovereign AI initiative could lead to up to $4 trillion in AI spending by the end of the decade [8]

Core Viewpoint - Intel Corporation is facing significant challenges in regaining lost market share to advanced AI accelerator chip developers, experiencing mounting losses in its fabrication business, and showing leadership stagnation in implementing necessary changes [1] Group 1: Market Position - Intel is struggling to recover its market share against competitors in the AI accelerator chip sector [1] - The company is experiencing an existential crisis due to these competitive pressures [1] Group 2: Financial Performance - Intel is facing mounting losses in its fabrication business, indicating financial distress [1] Group 3: Leadership and Strategy - There is a noted stagnation in leadership effectiveness regarding the implementation of necessary strategic changes [1]

Market Overview - The U.S. equity market experienced a strong recovery in May 2025, driven by robust earnings, decreasing trade tensions, and rising investor confidence in the economy, marking a significant improvement from April 2025 [1] - Deutsche Bank analysts have raised the target for the S&P 500 index from 6,150 to 6,550 by the end of 2025 [1] AI Stocks Potential - AI stocks are expected to be key beneficiaries of the renewed market optimism, presenting significant growth potential for long-term investors [2] Company Analysis: Nvidia - Nvidia reported revenue of $44.1 billion for Q1 fiscal 2026, a 69% year-over-year increase, and generated $26 billion in free cash flow [4] - The company holds nearly 80% of the AI accelerator market and is focused on both AI training and inference workloads, with major cloud providers deploying approximately 72,000 GPUs weekly [5] - Nvidia's software ecosystem, including CUDA and TensorRT, creates a sticky customer base, with networking revenue growing 64% quarter over quarter to $5 billion [6] - Despite facing nearly $8 billion in revenue loss due to export restrictions to China, Nvidia maintains a positive outlook for Q2 fiscal 2026 [7] Company Analysis: Broadcom - Broadcom has established itself as a significant player in AI infrastructure, with custom AI chips being utilized by major hyperscalers [8] - The CEO projects a serviceable addressable market of $60 billion to $90 billion from these clients by fiscal 2027, with additional engagements with four more hyperscalers [9] - The recent $69 billion acquisition of VMware enhances Broadcom's position in enterprise software and hybrid cloud infrastructure, allowing it to offer comprehensive AI solutions [10] Company Analysis: CoreWeave - CoreWeave has transitioned from cryptocurrency mining to becoming a prominent AI hyperscaler, with a cloud infrastructure specifically designed for AI workloads [12] - The company reported $982 million in revenue for Q1 fiscal 2025, a 420% year-over-year increase, and adjusted operating income rose 550% to $163 million [13] - CoreWeave has a $25.9 billion revenue backlog from multi-year contracts, indicating strong demand for its services [13] - A strategic partnership with Nvidia provides CoreWeave with preferential access to advanced GPUs, supported by Nvidia's $2.5 billion equity stake in the company [14] - CoreWeave's stock trades at 37.5 times sales, reflecting its large addressable market and impressive financial performance [15]

Core Viewpoint - The article compares Nvidia and Alphabet as leading stocks in the AI sector, discussing their growth, valuations, and investment potential amidst the generative AI boom [2][4]. Group 1: Nvidia's Performance and Valuation - Nvidia has experienced a remarkable stock increase of 701% during the generative AI boom, significantly outperforming Alphabet's 72% growth [3]. - The stock is currently valued at 25 times sales and 54 times free cash flows, leading some investors to view it as overpriced [5]. - Despite high valuations, Nvidia's sales doubled in 2023 and are expected to double again in 2024, indicating strong demand for its AI accelerator chips [7]. - Nvidia's stock is favored by growth-oriented investors, with a majority of analysts rating it as a "buy" and an average one-year price target 24% above its current value [6]. Group 2: Alphabet's Financial Strength and Valuation - Alphabet generates annual revenues approximately three times larger than Nvidia's, despite slower growth rates [9]. - The stock trades at 5.9 times sales and 28 times free cash flows, making it more reasonably priced compared to Nvidia and in line with S&P 500 averages [11]. - Alphabet is positioned as a value-oriented investment in the generative AI boom, with a strong long-term outlook regardless of AI developments [12]. Group 3: Investment Recommendations - While Nvidia may maintain its dominance in AI hardware, its high valuation raises concerns for some investors [14]. - Alphabet is presented as a more attractive investment option due to its longevity and reasonable share price, making it a strong buy at current valuations [15].

Group 1: Investment Opportunity in TSMC - TSMC is the largest chip manufacturer in the world and plays a crucial role in the advancement of AI technology [6][7] - The company has a significant technological lead, being one of only three manufacturers capable of producing 3 nm chips, which are essential for AI applications [7][8] - TSMC's sales increased by 35% last quarter, with advanced 5 nm and 3 nm nodes accounting for 58% of total revenue, indicating strong demand for AI chips [9] Group 2: Financial Performance and Growth Outlook - TSMC is investing $38 billion to $42 billion in capital expenditures this year, a 34% increase from the previous year, to meet the growing demand for AI chips [11] - The company expects mid-20% revenue growth this year and over 20% average annual revenue growth over the next five years, while maintaining a gross margin above 53% [13] - TSMC shares are currently trading at less than 19 times the analysts' consensus estimate for 2025 earnings, making it an attractive investment compared to the S&P 500's aggregate P/E ratio [12] Group 3: Market Position and Competitive Advantage - TSMC has built a substantial moat that makes it difficult for competitors to gain market share, attracting major clients like Nvidia and Apple [10] - The company is planning to spend $100 billion over the next few years to expand manufacturing capacity in the United States, further solidifying its market position [11] - If included in the S&P 500, TSMC would account for approximately 1.8% of the index, highlighting its significant market capitalization [16]

Group 1: AI Chip Market Overview - Current market conditions present a potential opportunity for investment in AI chip stocks before they rebound to growth [1] - A recent sell-off in AI stocks was triggered by DeepSeek AI's advancements in efficient algorithms, suggesting that major tech companies may not need to invest heavily in advanced GPUs [1][2] - The sell-off was exacerbated by Nvidia's earnings report and new tariffs imposed by President Trump on China, Mexico, and Canada [2] Group 2: Taiwan Semiconductor Manufacturing (TSMC) - TSMC is the largest chip manufacturer globally, holding over 60% of semiconductor fabrication spending, which is increasing due to demand for high-end AI chips [4][8] - The company plans to significantly increase capital investments, forecasting $38 billion to $42 billion for 2025, a 34% increase from 2024 [5] - TSMC's investment strategy includes a $100 billion commitment to the U.S. and expansion of facilities in Arizona, which may help mitigate tariff impacts [7] Group 3: Advanced Micro Devices (AMD) - AMD is currently a distant second in the GPU market for AI training, with a potential loss of market share to Nvidia [9] - Despite a disappointing sales outlook with a projected 7% sequential drop, AMD's total addressable market for AI accelerator chips is expected to reach $500 billion by 2028 [10][11] - AMD's stock trades at 21 times earnings expectations, presenting a buying opportunity given the anticipated earnings growth of 38% over the next two years [13]