What is the "AI's Ripple Effect" and why is it an investment opportunity?

The "AI's Ripple Effect" refers to how success in artificial intelligence by major tech companies creates a chain reaction of demand throughout the technology supply chain. When companies like Alphabet invest heavily in AI, they need specialized hardware, servers, and software to make it work. This creates significant growth opportunities for the companies that provide this essential infrastructure - from semiconductor manufacturers who make the chips to server companies that build the data centers. These "picks and shovels" of the AI revolution stand to benefit from the massive spending happening across the tech industry regardless of which specific AI applications ultimately succeed.

What are semiconductors and why are they important for AI?

Semiconductors are materials that have electrical conductivity between that of a conductor and an insulator, which makes them the foundation of all modern electronics. In the context of AI, specialized semiconductors (particularly graphics processing units or GPUs) are crucial because they can perform the massive parallel computations needed to train and run artificial intelligence models. These chips act like the "brain" that powers AI systems. Companies that design or manufacture these specialized chips (like NVIDIA, AMD, and TSM) are fundamental to the entire AI ecosystem, as no AI application can function without this hardware foundation.

What does "AI infrastructure" actually include?

AI infrastructure refers to all the physical and digital components needed to create, train, and deploy artificial intelligence systems. This includes semiconductors and chips that process the calculations, servers and data centers that house these components, cooling systems to prevent overheating, network equipment to move data quickly, and specialized software to manage data and workloads. Think of it like the foundation and framework of a house - not as visible as the finished rooms, but absolutely essential for the structure to stand. Companies in this group represent different parts of this infrastructure, from chip designers like NVIDIA to server manufacturers like Dell and data management platforms like Snowflake.

What does "Analyst Rating" tell me about these stocks?

Analyst Ratings are professional opinions from financial experts who study companies and make recommendations about their stock. These ratings typically range from "Strong Buy" to "Strong Sell" with variations in between. A positive rating (like "Buy" or "Outperform") means analysts believe the stock will likely perform better than the market average or its peers. These ratings are based on detailed analysis of the company's financial health, growth prospects, competitive position, and other factors. While helpful as one data point, it's important to remember that analyst ratings are opinions, not guarantees, and should be just one factor in your investment decisions.

What does "Potential Profit %" mean?

Potential Profit % represents the estimated percentage increase in a stock's price that analysts or the platform believes is possible over a specific timeframe. It's calculated by comparing the current stock price to a target price based on financial analysis. For example, if a stock trading at $100 has a Potential Profit % of 20%, analysts believe it could reach $120. This metric helps you understand the growth opportunity analysts see in a stock. However, it's important to remember this is just a projection - actual performance could be better or worse than the estimate, as stock markets are inherently unpredictable and all investments carry risk.

16 handpicked stocks

AI's Ripple Effect

This carefully selected group of stocks represents the backbone of the AI revolution. Chosen by professional analysts, these companies provide the essential infrastructure that powers artificial intelligence, from advanced semiconductors to specialized data management tools.

Han Tan | Market Analyst

Published on July 11

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

NVIDIA Corporation

NVDA

Current price

$189.05

As the leader in GPUs, Nvidia's hardware is the primary engine for the AI models driving Alphabet's growth, making it a direct beneficiary of increase...

As the leader in GPUs, Nvidia's hardware is the primary engine for the AI models driving Alphabet's growth, making it a direct beneficiary of increased AI spending.

Super Micro Computer, Inc.

SMCI

Current price

$52.15

A leading provider of high-performance servers optimized for AI, which are crucial for building out the data center infrastructure that powers Google'...

A leading provider of high-performance servers optimized for AI, which are crucial for building out the data center infrastructure that powers Google's AI services.

Intel Corporation

INTC

Current price

$36.46

A foundational semiconductor manufacturer whose data center and AI-focused chips benefit from the broad industry-wide investment in artificial intelli...

A foundational semiconductor manufacturer whose data center and AI-focused chips benefit from the broad industry-wide investment in artificial intelligence.

Advanced Micro Devices, Inc.

AMD

Current price

$169.19

Broadcom Inc.

AVGO

Current price

$342.35

Marvell Technology Group Ltd.

MRVL

Current price

$85.87

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

≈

In 12 months it might be worth:

$1,000.00

+15.52%

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About This Group of Stocks

Our Expert Thinking

Alphabet's success with AI integration validates a major investment supercycle. This creates a powerful ripple effect throughout the tech supply chain, boosting demand for the companies that provide the "picks and shovels" of the AI gold rush - from chips to servers to software.

What You Need to Know

This collection focuses on the critical infrastructure providers enabling AI development, not just the big tech names using AI. These companies benefit directly from the massive capital expenditure tech giants are making to maintain leadership in artificial intelligence.

Why These Stocks

Each company in this group plays a vital role in the AI ecosystem - whether manufacturing the high-performance chips that power AI models, building server infrastructure, or developing the data management tools essential for AI workloads. They represent a multi-year technology growth story.

Group Performance Snapshot

15.61%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 15.61% over the next year.

12 of 16

Stocks Rated Buy by Analysts

12 of 16 assets in this group are rated Buy by professional analysts.

14.9% vs 4%

Group Growth vs Bank interest

This group averaged a 14.9% return last month, beating the typical 4% bank rate.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🚀

Riding the AI Spending Wave

Tech giants are investing billions in AI infrastructure to maintain their competitive edge. These companies are receiving a steady stream of orders as the AI arms race accelerates.

🔍

The Hidden AI Winners

While headlines focus on big tech names using AI, these "behind-the-scenes" companies actually build the technology that makes AI possible. They're essential players that many investors overlook.

💡

Multi-Year Growth Story

This isn't just a short-term trend. The AI revolution represents a fundamental shift in technology that's expected to drive growth for these infrastructure providers for years to come.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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