What does market capitalization or "market cap" mean?

Market capitalization (or "market cap") is the total value of a company's outstanding shares of stock. It's calculated by multiplying the current stock price by the total number of shares. When we talk about Nvidia and Microsoft racing to $4 trillion, we're referring to their total market value reaching that milestone, making them among the most valuable companies in the world.

Why is the AI infrastructure build-out creating opportunities for these companies?

Building AI infrastructure requires massive investment in specialized hardware and facilities. Companies like Nvidia and Microsoft are spending billions on chips, servers, data centers, and power systems. This creates a "ripple effect" where their suppliers see growing demand for their products and services. These suppliers—from chip manufacturers to data center companies—are positioned to benefit from this unprecedented spending wave.

What is a GPU and why is it important for AI?

GPU stands for Graphics Processing Unit. Originally designed for video games, GPUs excel at performing many calculations simultaneously, which happens to be perfect for AI workloads. Nvidia's specialized AI GPUs are the leading hardware for training and running AI models like ChatGPT. The growing demand for AI capabilities is driving explosive growth in GPU sales, benefiting not just Nvidia but also the companies that help manufacture, power, and connect these chips.

What is a "REIT" and why are data center REITs included in this group?

REIT stands for Real Estate Investment Trust—a company that owns, operates, or finances income-producing real estate. Data center REITs like Equinix (EQIX) and Digital Realty (DLR) own the specialized buildings where cloud and AI computing happens. As AI requires more computing power, more data centers need to be built, which benefits these companies. REITs typically pay dividends, potentially offering both growth from the AI boom and income for investors.

What is EDA software and why is it important for the AI industry?

Electronic Design Automation (EDA) software is specialized technology that helps engineers design complex computer chips. Companies like Cadence (CDNS) and Synopsys (SNPS) provide the essential tools that enable the creation of advanced AI processors. Without this software, it would be impossible to design the increasingly complex chips powering AI systems. As demand for more sophisticated AI chips grows, these EDA companies benefit as their tools become even more critical to the industry.

16 handpicked stocks

Race to Four Trillion

Invest in the companies building the foundation of the AI revolution. These carefully selected stocks represent crucial suppliers and enablers benefiting from Nvidia and Microsoft's historic race to $4 trillion valuations and their unprecedented spending on AI infrastructure.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 30