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Artificial intelligence (AI) has emerged as the dominant market theme halfway through 2023, driven by significant investments from AI hyperscalers in data centers, which can take years to become operational.
Nvidia (NASDAQ: NVDA), a key player in AI supply chains, reported a 69% year-over-year revenue growth for Q1 FY2026 and projects a 50% increase to $45 billion for Q2. Its GPUs are critical for AI workloads and will continue to see demand as data centers are outfitted with new technology, driven by aging GPUs.
Taiwan Semiconductor (NYSE: TSM), Nvidia’s chip manufacturer, expects a 45% compound annual growth rate over the next five years due to AI chips, contributing to its overall revenue growth of nearly 20%. Meanwhile, Amazon’s AWS, accounting for 63% of its operating profits in Q1 despite only 19% of revenue, and Alphabet (NASDAQ: GOOG) are also well-positioned in this growing market.
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