A lot of investors are observing major technology firms pouring significant funds into various projects.
artificial intelligence (AI) infrastructure
The major query at hand is whether, or exactly when, there will be a sufficient return on these investments.
Some worry that large-scale capital expenditure plans previously announced might be reduced or delayed. However, increasing evidence suggests that spending continues and could possibly speed up. Should this trend persist, then two of the primary winners from such increased spending would clearly be smart choices for investment at present.
Where should you put your $1,000 investment at this moment?
Our analysis group has just disclosed their insights into what they consider to be the
10 best stocks
to buy right now.
Learn More »
“A ton” of AI data center demand
At present, one of the primary beneficiaries of that investment is
Nvidia
(NASDAQ: NVDA)
. Its high-end chips are filling server stacks in many data centers being built globally. As a result, the AI boom has been of game-changing benefit to Nvidia and its investors. The stock has been under pressure, though, as questions surface about demand from a slowdown in AI infrastructure spending, and regulatory headwinds in the form of export restrictions.
The concerns related to capital spending may be overblown. Jonathan Gray, chief operating officer of asset manager
Blackstone
, recently informed CNBC: “I believe this trend is strong. It should persist…all things considered, we’re seeing immense demand.” This is positive for Nvidia investors and backs up what major Nvidia clients have observed.
Meta Platforms
,
Microsoft
, and
Amazon
have been stating their intentions to maintain, or possibly increase, their capital expenditure strategies.
Export restrictions might pose greater challenges for Nvidia. The company’s leadership has announced that Nvidia intends to account for approximately $5.5 billion in losses following the Trump administration’s imposition of export limitations and mandatory licensing requirements for selling their H10 AI chips to China. These chips were developed as altered versions tailored explicitly to adhere to earlier regulatory standards for shipping products to China.
The image of China may be getting better.
China represents a crucial market for Nvidia. Worries about operations within that region constitute a significant factor behind the decline in Nvidia’s stock value this year. The country accounted for 13% of their overall revenues last year, which marked a decrease from 17% in the previous year.
prior fiscal year
, indicating that Nvidia doesn’t depend excessively on customers from China.
Recent reports indicate that President Donald Trump might also ease export limitations on AI chips. As Biden administration’s export restrictions were about to take effect, Trump allegedly plans to rescind these rules. The future regulatory landscape remains uncertain; however, any impact on Nvidia’s business may already reflect in their stock price.
The takeaway is that
investing in the top player in AI
It should still be viable, particularly since the stock has declined this year. Given that Nvidia’s business remains robust, investors might consider looking into its primary supplier for a potentially profitable investment at present.
Another global AI leader
Taiwan Semiconductor
(TSMC)
(NYSE: TSM)
also counts Nvidia as one of its key clients. TSMC provides semiconductor products such as microprocessors.
graphics processing units (GPUs)
, microcontrollers, and various high-tech components. Nvidia is among multiple major tech firms that depend on TSMC; however, this Taiwanese corporation serves an extensive range of clients. In the previous year alone, they provided goods to over 500 different customers.
The demand for its services is increasing rapidly. In the first quarter, revenue jumped by 42%, and profits increased even more dramatically. Net income climbed as well.
reduced earnings per share
Increased by 60% compared to the previous year. This swift expansion is anticipated to keep going up. The management forecasts that the revenue will rise by an additional roughly 30% in the present quarter when measured against the same period last year.
Nevertheless, similar to Nvidia, TSMC’s shares have been reduced by over 10% this year due to investor actions. This has resulted in an attractive valuation for the company. Currently, the stock is trading at a lower price compared to before.
forward price-to-earnings ratio
below 20.
Both Nvidia and TSMC stock prices have taken a hit because of worries over decelerating growth. However, considering the current client demand and recent statements from technology firms, the surge in artificial intelligence development suggests otherwise.
not become a bubble
Even if expenditures on building out data centers decrease, this wouldn’t fully illustrate the whole scenario. Artificial Intelligence also encompasses software that will probably be utilized across nearly all devices targeting both consumer markets and numerous businesses.
Adopting that wider perspective ought to reassure most investors about holding both Nvidia and TSMC at their current valuations.
Don’t let this second chance for a possibly profitable opportunity slip away.
Have you ever felt like you’ve missed out on purchasing the top-performing stocks? If so, you should definitely listen to this.
From time to time, our skilled group of analysts releases a
“Double Down” stock
Here’s a suggestion for firms that seem poised for growth. Should you fear missing out on potential gains, this might be an ideal moment to purchase shares prior to their inevitable rise. The statistics clearly indicate what could happen.
-
Nvidia:
If you had put in $1,000 when we increased our investment in 2009,
you’d have $302,503
!* -
Apple:
If you had invested $1,000 when we increased our stake in 2008,
you’d have $37,640
!* -
Netflix:
If you had put in $1,000 when we increased our investment back in 2004,
you’d have $614,911
!*
Currently, we’re sending out “Double Down” alerts for three amazing companies.
available when you join
Stock Advisor
,
And this might not come around again for quite some time.
See the 3 stocks »
*Stock Advisor returns as of May 5, 2025
John Mackey, who previously served as the CEO of Whole Foods Market—an entity now owned by Amazon—is part of The Motley Fool’s board of directors. Additionally, Randi Zuckerberg, formerly responsible for market development and spokesperson roles at Facebook, and the sibling of Meta Platforms’ CEO Mark Zuckerberg, also sits on The Motley Fool’s board.
Howard Smith
holds stakes in Amazon, Microsoft, and Nvidia. The Motley Fool has interests in and advocates for buying shares of Amazon, Blackstone, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. Additionally, they recommend the following options: purchasing long-term call options at a strike price of $395 for January 2026 on Microsoft, as well as selling short-term call options with a higher strike price of $405 for the same month and year on Microsoft. Furthermore, The Motley Fool has a
disclosure policy
.
