Investments in artificial intelligence (AI) are likely to be significant as many companies benefit from this trend. Whether you’re a company implementing AI to improve your business or creating AI software, opportunities abound.
But AI also has a hardware component, and no matter what happens to individual companies, many of these companies will be winners. I’ve identified four of his companies that will be big winners over the next few years.
1.ASML
Microchips are the core of every computer used to create AI models. Manufacturing these components requires highly specialized machinery, and one of the leading suppliers in this field is: ASML (NASDAQ: ASML). The company makes lithography equipment that forms conductive traces on chips.
Semiconductors have reduced the distance between these traces to as little as 3 nanometers (nm). For reference, a human hair is approximately 80,000 to 100,000 nanometers wide. The shorter distance between traces makes these chips more powerful and efficient. This is an important need for any device.
Currently, ASML has a technology monopoly in this field, as no other companies are manufacturing EUV (extreme ultraviolet) lithography equipment. If you’re building a cutting-edge chip, you should use ASML. As a result, ASML will be a big winner in this space.
2. Taiwan Semiconductor
taiwan semiconductor (NYSE:TSM) is a big user of these machines. The company is the world’s largest contract chip manufacturer, which means it makes chips for other customers.
TSMC is a leader in this space, with 3nm chips but also developing 2nm chips scheduled for release in 2025. Taiwan Semiconductor’s innovative culture is always working on next, resulting in continued revenue growth for these new chips. Product launch.
Some of Taiwan Semiconductor’s customers include: Nvidia (NASDAQ:NVDA) and AMDprovides another important component to the AI value chain.
3. Nvidia
Nvidia The company’s best-in-class GPU (graphics processing unit) is perhaps the most interesting of the group, due to its importance in AI. GPUs are essential hardware because they are used to process huge amounts of data and train AI models.
When companies equip computers to train these models, they do more than just buy one or two GPUs. They buy thousands of things. This caused Nvidia’s revenue to explode in his 2023 as demand for GPUs was unprecedented.
As long as AI is a big trend, Nvidia’s strength will continue because AI requires building large-scale computing infrastructure.
4. Super microcomputer
You can’t buy a few thousand Nvidia GPUs with Taiwan Semiconductor chips made on ASML’s lithography machines, plug them in, and expect good results. Instead, to get the most performance out of a supercomputer, companies need dedicated servers for maximum efficiency.
there super microcomputer (NASDAQ:SMCI) Supermicro specializes in server design for engineering simulation, drug discovery, AI model training, and more. The company’s products are highly configurable, whether your enterprise needs hundreds or thousands of GPUs.
As the demand for AI computers reaches the mass market, Supermicro will continue to outperform. This is one reason why the stock price will rise by about 140% heading into 2024.
AI winner basket
You don’t have to pick a single winner to be a successful AI investor. Alternatively, you could choose a variety of stocks that are important suppliers in the AI space and are likely to do very well.
This group provides the necessary building blocks for all AI models, so whichever company produces the best AI product will be successful.
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Keithen Drury works for Taiwan Semiconductor Manufacturing Company. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Super Micro Computers. The Motley Fool has a disclosure policy.
4 Incredible Companies That Will Be Big Winners Regardless of Who Wins the Artificial Intelligence (AI) Arms Race” was originally published by The Motley Fool.
