3 Stocks Primed to Cash In if Artificial Intelligence (AI) Spending Hits $1 Trillion Next Year
Keithen Drury, The Motley Fool
Fri, July 24, 2026 at 9:37 PM GMT+5:30
4 min read
- NVDA
-0.92% - GOOG
+0.24%
This year, the four AI hyperscalers plan to spend around $650 billion in total on their data center capital expenditures. That’s a daunting figure, but it will likely be exceeded as hyperscaler spending projections creep up throughout the year. However, next year, this figure is on track to reach $1 trillion, according to Nvidia (NASDAQ: NVDA). That would be a major increase, but it’s in line with the language that some hyperscalers have already been using
During its Q1 2026 conference call, one hyperscaler, Alphabet, told investors to expect “significantly” higher capital expenditures in 2027. Informing investors that early in the year about the following year’s guidance can only mean one thing: Prepare for a huge increase in spending. That jibes with Nvidia’s $1 trillion projection
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If that pans out, the three that should be able to capitalize on increased spending more than any others are Nvidia, Broadcom (NASDAQ: AVGO), and Taiwan Semiconductor Manufacturing (NYSE: TSM). I think they offer investors huge upside potential, and represent some of the best buys in the market today
Nvidia
Nvidia remains front and center in the AI infrastructure build-out, as its GPUs and the equipment to support them have become the industry standard for data center computing power. Nvidia’s GPUs can handle a wide range of tasks, and their flexibility is paramount to their success. Its results continue to blow past expectations quarter after quarter, with last quarter’s revenue growing by 85% and next quarter’s revenue expected to nearly double year over year. Despite this incredible growth, the stock trades for just 22 times forward earnings, essentially pricing it like a market-average stock.
If hyperscaler spending hits $1 trillion next year, Nvidia will likely blow past analysts’ expectations again. That makes Nvidia a no-brainer investment right now
Broadcom
Broadcom is one of the new kids on the block in the AI computing market, but it’s making a huge splash. Instead of competing head-on with Nvidia in the GPU market, it’s taking a different path. It’s partnering directly with AI hyperscalers to design custom AI chips called application-specific integrated circuits that are purpose-built for the narrow range of workloads they are expected to see. These chips are far more cost-effective than GPUs for the tasks they are designed to handle, but they won’t put Nvidia out of business because GPUs are still needed for many functions.
