The stock market has cooled a little in recent weeks after its hot rhythm in the past two years, but it is still solidly in the Haussier market territory. THE S&P 500 is out of its level of all time in mid-February about 6.4%. In the meantime, Artificial Intelligence (AI) continues to be an engine of the movements of this market, the recent progress of this technology seeming to have could have revolutionary applications for the companies that implement them.
If this bullish market must continue, AI will likely play a role. Let us examine three AI infrastructure actions which deserve to be considered on this bullish market.
As long as IA infrastructure expenses continue tirelessly, Nvidia(Nasdaq: NVDA) The company remains the best placed for the benefit. It is Graphic processing units (GPU) have become the backbone of the AI infrastructure because of their high treatment power, which makes it superb fleas for the formation of AI and inference models.
Meanwhile, the CUDA software platform of the company, which has been created for a long time to allow developers to program its chips for tasks outside their original objective to accelerate the graphic rendering, has created a large ditch for the company. Since then, Nvidia has only widened its ditch by Cuda X, a set of libraries and microservices designed for AI. This allowed Nvidia to take a dominant market share of 90% on the GPU market.
Meanwhile, AI infrastructure expenses continue to increase. The three major cloud computing companies have planned more than $ 250 billion in capital expenditure (CAPEX) this year, the vast majority of the one that went directly to AI infrastructure. Meta-platforms plans to spend up to $ 65 billion for AI infrastructure, while a business consortium led by Openai and Flexible bank has undertaken to spend $ 500 billion on the construction of AI data centers in the United States as part of the Stargate project.
Although all these Capex money will not have been to the GPUs of Nvidia, the company will get more than its fair share. At the same time, the action is not expensive, negotiating a price / benefit ratio (P / E) in the long term of 26.5 times 2025 Estimates of analysts and a price / benefit ratio for growth (PEG) of 0.5. PEG reports under 1 generally indicate that a stock is undervalued.
Image source: Getty Images.
Another manufacturer of chips which benefits from an increase in IA infrastructure expenses is Broadcom(Nasdaq: Avgo). While Nvidia is the leader of mass market GPUs, Broadcom is preparing a nice niche as a personalized AI chip manufacturer. Its integrated circuits specific to the application, or ASIC, are designed for very specific tasks. As such, its personalized AI chips surpass GPUs for these specific tasks and tend to have more efficient energy consumption. However, they do not have the flexibility of GPUs.
Broadcom’s first customer Ai Puce Customer was the Cloud Computing giant AlphabetIncluding the Trillium tensor treatment unit (TPU) is designed specifically to operate in Google Cloud Tensorflow (a software library for AI and automatic learning). Alphabet said that using a TPU combination alongside GPUs had improved inference time and cost savings.
Since then, Broadcom has added other customers, who would be Meta platforms, the owner of Tiktok bytedance, Openai and, more recently, Apple. He said his three oldest clients (Alphabet, Meta and Bytedance) could each deploy 1 million ia chips by the 2027 fiscal year (ending October 2027), representing an opportunity from 60 billion to $ 90 billion. Its more recent customers could add to these totals. It took about 15 months for the alphabet chips to be designed and then deployed in its data centers, which were considered very quickly.
Trading at 30 times at the front p / e, Broadcom is well placed to benefit from an increase in IA infrastructure expenses.
Another company which should continue to benefit from an increase in IA infrastructure expenses is Manufacture of Taiwan semiconductors(NYSE: TSM)or TSMC for short. The company is the main manufacturer of semiconductor contracts in the world. Due to the cost of building manufacturing factories (foundries), the need to manage near the full capacity to be profitable, and the technological expertise necessary to innovate and push the sizes of lower chips, most semiconductor companies today design fleas and let third parties make them. TSMC has both Nvidia and Broadcom among its best customers, as well as its greatest Apple customer.
TSMC has become the leader in the manufacture of advanced fleas, such as those used for AI, while other foundry competitors such as Intel And Samsung have struggled. As such, it has become an integral part of the semiconductor value chain. The company constantly advances its manufacturing technology and reduces the size of its chips, which makes them more powerful and energy efficient. The position of TSMC market leader, on the other hand, has led to a high pricing power and an increase in gross margins.
At the same time, the company builds new facilities to try to meet demand. The combination of the addition of capacity, pricing power and margins improve is increased for TSMC in the future. At the same time, the stock is inexpensive, negotiating with a long time just more than 19 times and an ankle of 0.67 times.
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Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Geoffrey Seiler has alphabet positions. The Motley Fool has positions and recommends the alphabet, apple, intel, Meta platforms, the manufacture of Nvidia and Taiwan semiconductors. The Motley Fool recommends Broadcom and recommends the following options: short February 2025 $ 27 calls Intel. The Word’s madman has a Disclosure policy.
