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Russian (RU) Adam Spatacco, The Motley Fool
Sun, May 18, 2025, 12:22 PM 5 min read
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McKinsey expects that AI chips and related hardware will receive the largest allocation of infrastructure spend over the next five years.
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Ongoing spending from cloud hyperscalers underscores strong commitment to data center buildouts and GPUs.
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These spending dynamics bode particularly well for semiconductor stocks.
Global management consulting firm McKinsey & Company recently published a report detailing compelling trends in research and development (R&D) and capital expenditure (capex) related to artificial intelligence (AI) investments over the next five years.
Per McKinsey's analysis, spending on AI infrastructure could reach $6.7 trillion by 2030. Among these different infrastructure opportunities, McKinsey estimates that nearly $3.1 trillion will be allocated toward chip designers for AI-equipped data centers.
Let's analyze which companies are making major investments in AI infrastructure right now and explore what they're investing in. From there, I'll reveal my top four data center stocks to load up on right now and explain why.
Investors don't need to look much further than the "Magnificent Seven" to buy into McKinsey's forecast around rising AI-related capex. For the last couple of years, Microsoft, Alphabet, and Amazon have been shelling out billions, partnering with high-profile businesses such as OpenAI (maker of ChatGPT) and Anthropic.
Integrating large language models (LLMs) and generative AI into their respective ecosystems has supercharged growth for megacap tech -- especially in areas such as cybersecurity, workplace productivity software, and cloud computing infrastructure.
Just this year alone, Microsoft, Alphabet, and Amazon are forecast to spend nearly $260 billion on capex. Per the commentary of their respective management teams, much of this spend will be allocated toward chips and outfitting AI data centers -- just as McKinsey is calling for.
In addition to the cloud hyperscalers above, Meta Platforms recently told investors that it is actually raising its capex budget for 2025. Similar to Microsoft, Alphabet, and Amazon, Meta has proven to be a big buyer of chips over these last few years. Additionally, each of these Magnificent Seven members has also been exploring their own custom silicon.
With this backdrop, here are four companies that stand to benefit from these AI infrastructure tailwinds.
When it comes to AI chip designers, my top two picks are Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD). Per industry estimates, Nvidia is estimated to hold 90% (or more) of the AI GPU market with AMD comprising much of the remainder. Considering each company I referenced above currently runs on both Nvidia and AMD chip architecture, the capex spend for this year should be a major tailwind for both chip stocks.
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