Artificial intelligence (AI) chatbot applications like ChatGPT, Claude, and Gemini can interpret and generate text, images, videos, and computer code, driving a productivity boom across the global economy. These AI applications rely on data centers filled with advanced semiconductors from companies like Nvidia, AMD, and Micron. Nvidia’s CEO estimates that the $1 trillion installed base of data center infrastructure worldwide will double over the next five years due to AI, presenting a substantial opportunity for chip companies.
Nvidia has seen significant growth in its data center revenue, driven by its H100 GPU, which is popular for AI workloads. The company is expected to ramp up shipments of its new H200 GPU, offering faster inferencing speeds and lower energy consumption. Nvidia’s upcoming Blackwell architecture is expected to power its next-generation chips, with the H200 delivering 15 times the inferencing speed of the H100. Wall Street projects Nvidia’s total revenue to reach $110 billion in the current fiscal year.
Advanced Micro Devices (AMD) is competing with Nvidia in the data center market with its MI300 series of data center chips, including the MI300X GPU and MI300A combined GPU and CPU configuration. AMD also has a dominant market share in the AI-enabled personal computing industry, with its Ryzen AI chips powering millions of computers. The recent Ryzen AI series boosted the company’s Client segment revenue by 62% year over year, and growing shipments of the MI300 chips could drive further growth.
Micron, known for producing memory (DRAM) and storage (NAND) chips, plays a critical role in maximizing the performance of GPUs like those from Nvidia and AMD. Micron’s HBM3E data center solution is powering Nvidia’s new H200 GPU, offering greater cost efficiency and faster market entry for AI models. Micron’s revenue jumped 57% year over year in fiscal 2024, with accelerated revenue growth projected for the upcoming fiscal quarter. Despite trading at an all-time high, Micron stock may be a good buying opportunity for investors.
Investors looking to ride the AI boom may consider owning stakes in leading chip companies like Nvidia, AMD, and Micron. These companies are driving growth in data center infrastructure and AI applications, presenting opportunities for significant revenue growth. Nvidia, with its sought-after data center chips and upcoming Blackwell architecture, is expected to see record revenue in the current fiscal year. AMD’s MI300 series and Ryzen AI chips are positioning the company for growth in the data center and personal computing markets. Micron’s memory and storage solutions are critical for maximizing GPU performance and are seeing increased demand in AI-enabled devices like computers and smartphones.
