Artificial intelligence (AI) infrastructure companies, referred to as “pick-and-shovel plays,” are gaining traction among investors due to rapid growth in AI spending. Notable companies include Nebius Group (NBIS), IREN (IREN), Astera Labs (ALAB), TeraWulf (WULF), and Cipher Mining (CIFR). In 2026, AI-related capital expenditures are projected to reach $515 billion, a significant increase from $390 billion in 2025, indicating a growing demand for AI compute resources.
Despite hefty initial investments, as the AI buildout stabilizes, companies in this sector anticipate a shift to profitability driven by recurring rental income. Nebius Group, for example, expects revenue growth to quintuple by 2026. Furthermore, AI’s impact on productivity is significant, with coding outputs surging over 30% in various sectors, reinforcing the case for ongoing investment in AI infrastructure.
Transformations in revenue models are evident; IREN has increased gross profits from under $200 million at its public offering to $600 million currently by adopting a high-margin GPU-as-a-Service model. Overall, the transition from speculative AI investments to concrete infrastructure is opening investment avenues that mitigate uncertainties surrounding software competition in the AI landscape.
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