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The AI build-out is still going at full strength.
Nvidia, a leader in graphics processing units (GPUs), and Broadcom, specializing in custom AI chips, are at the forefront of the artificial intelligence boom. Both companies recently provided strong financial guidance, indicating sustained growth in the AI sector. Nvidia anticipates a 70% revenue increase for the upcoming fiscal year, while Broadcom's AI semiconductor division expects to double its AI revenue in 2027 and 2028. These projections highlight robust demand for AI computing equipment and are further bolstered by secured supply chains, benefiting third-party manufacturers like Taiwan Semiconductor Manufacturing.
Despite their strong growth outlooks in the booming AI market, the stocks of Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing are considered to be reasonably priced. By evaluating these companies using their next fiscal year's earnings projections, the author suggests a significant upside potential of 50% to 100% over the next 18 months, assuming the rapid expansion of AI infrastructure continues. This valuation makes these three AI-centric stocks compelling investment opportunities for those looking to capitalize on the ongoing AI build-out.