Although artificial intelligence (AI) investing gets a ton of attention from the market, there’s a good reason for that. It’s where the majority of cash flows are being poured into, and following the money to where it’s being spent is a genius investing strategy.

Right now, most of the AI hyperscalers are still building their computing capacity, making companies that sell this equipment into great investments. I believe stocks like Nvidia (NVDA 0.27%), Taiwan Semiconductor (TSM -1.17%), and Broadcom (AVGO -0.48%) are among the best buys now, as they receive a boatload of this spending.

1. Nvidia

Nvidia has topped the list of best AI companies to invest in since the trend began in early 2023. Its graphics processing units (GPUs) are the computing muscle behind most of the AI technology people experience today, and show no signs of slowing down. Nvidia’s management projects that the AI hyperscalers will spend $600 billion on capital expenditures for AI data centers this year, but that figure could reach $3 trillion to $4 trillion globally by 2030. Nvidia captures a sizable chunk of that spending, as Wall Street analysts expect Nvidia to generate around $206 billion in revenue this year.

Time will tell if Nvidia can capture a large chunk of that projected spending, and a lot of it will hinge on whether its products are accepted back in China once the U.S. government grants Nvidia’s export license. However, I think that Nvidia still has the world’s best technology for general-purpose computing, making its products a no-brainer choice when building artificial intelligence computing capacity.

Nvidia remains a top stock pick in the AI realm, even if it has been a massive success over the past few years.

2. Taiwan Semiconductor

Nvidia is what’s known as a fabless chip company. It designs the products, but relies on other companies to manufacture the components that go into them. One of the most important companies in this setup is the chip foundry, which produces the microchips in the devices. Nvidia uses Taiwan Semiconductor for this work, and TSMC has made a name for itself in the industry by providing best-in-class technology and production yields.

Nearly all leading tech companies use TSMC’s chips. Often, two competitors both use chips produced by TSMC, such as Nvidia and AMD (AMD -1.05%). Because Taiwan Semiconductor is acting as a neutral party fabrication facility, this arrangement works great and allows it to capitalize on massive technology trends.

An investment in Taiwan Semiconductor is a bet that companies are going to use more advanced chips, and a greater quantity of them, in the future. I think that’s a very safe assumption, making TSMC a great stock to buy now.

3. Broadcom

Broadcom is challenging Nvidia’s dominance in the AI computing market by partnering with AI hyperscalers to design custom AI accelerator chips.

Nvidia GPUs are the undisputed leader of multi-purpose computing, and can handle many types of workloads, whether it’s AI training, cryptocurrency mining, or engineering simulations. However, if a client only uses an Nvidia GPU for one workload, these capabilities are wasted. By designing an AI chip with one workload in mind, Broadcom can achieve greater performance at a cheaper price.

This makes Broadcom’s custom AI accelerators a potentially massive business, and it’s starting to show up in the company’s results. In third-quarter fiscal year 2025 (ended Aug. 3), Broadcom’s AI revenue soared 63% year over year, outpacing Nvidia’s 56% growth rate.

This shows that Broadcom is gaining market share in this area, and it could be a force to reckon with over the next five years. I think Broadcom will be a great investment over the next few years as a result, and investors should consider scooping up shares alongside Nvidia and Taiwan Semiconductor.

Keithen Drury has positions in Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Broadcom (AVGO -2.69%) has been one of the biggest winners of the artificial intelligence (AI) boom, with its stock already up nearly 50% this year and hitting new all-time highs. A move like that often raises the question of whether it’s too late to buy the stock.

In Broadcom’s case, the answer is no. The company has a much larger AI opportunity in front of it, and the market is only starting to recognize how big that could be.

A custom AI chip powerhouse

Broadcom’s edge comes from its custom AI chip business, where it works with hyperscalers (owners of massive data centers) to design chips built for specific workloads. This is very different from Nvidia‘s off-the-shelf graphics processing unit (GPU) business, although in many cases, these custom chips are taking the job of a GPU.

Broadcom helps its customers develop what are called application-specific integrated circuits, or ASICs. These chips can take years to design and are created for customer-specific purposes. As such, they tend to deliver better performance and have lower power consumption for the particular tasks for which they’ve been designed compared to the more flexible GPUs.

Broadcom first proved itself when it helped Alphabet design its Tensor Processing Units. Those chips are now a critical piece of Alphabet’s cloud computing infrastructure and have given it a performance edge over rivals. Broadcom has since landed multiple new customers, including Meta Platforms and ByteDance. Management has said these three customers alone represent a $60 billion to $90 billion market opportunity in fiscal 2027 (ending in October 2027).

That would be a huge win by itself, but Broadcom recently revealed a fourth customer, which analysts widely believe is OpenAI, with an order topping $10 billion for next year (fiscal 2026). The timing matters here, as Broadcom had been talking about fiscal 2027 as the year its custom chip business really takes off. If OpenAI is already moving to production much earlier than expected, it means that growth is going to accelerate before then.

OpenAI and Apple change the picture

Adding OpenAI into the mix is a game-changer. The company has become the face of generative AI, with its models powering ChatGPT and its close ties to Microsoft helping power its AI offerings. With AI workloads exploding, OpenAI is looking to reduce its dependence on Nvidia and control costs. Broadcom is stepping right into this need, and with the inference market expected to eventually far surpass training, the demand for chips that can lower inference costs is a big one.

Apple, meanwhile, is an even newer customer, earlier in its development timeline. Apple has been trailing in AI, which is something it surely wants to remedy, and one way to do this is with its own custom chips. Once that happens, Broadcom will have another massive revenue stream layered in on top of Alphabet, Meta, ByteDance, and now OpenAI.

This is why the stock’s rally isn’t the end of the story. Broadcom is in a position to be the go-to designer for the biggest names in tech wanting to create their own AI chips. Companies are looking for an alternative to Nvidia and for ways to reduce inference costs, and Broadcom is starting to fill that need.

Networking and software add support

That said, Broadcom isn’t just a custom chip play. Its networking business is also critical to AI infrastructure, supplying components like Ethernet switches and optical interconnects that move data inside the largest AI clusters. And when the company wins custom AI chip deals, that will feed into this business as well.

On top of that, Broadcom now has a meaningful software business thanks to its acquisition of VMware. It has been streamlining VMware and shifting it to a subscription model, while also positioning it to manage AI workloads across hybrid and multi-cloud environments. That makes Broadcom an increasingly important player in enterprise AI as well.

Why the stock still looks attractive

Broadcom’s stock has already had a big run, and it’s not cheap on a forward price-to-earnings (P/E) basis, with a 38 multiple. However, the opportunity in front of it is huge, and it just got bigger with OpenAI.

The pace at which OpenAI’s custom chips moved from concept to production suggests that Broadcom may be able to speed the process along more quickly than expected. When a company the size of Apple is next in line, that’s absolutely huge. Networking and software provide additional growth levers, but the real story is Broadcom’s position as the custom AI chip partner to the biggest players in tech.

That’s why even after hitting new highs, Broadcom stock still looks like a buy.

Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.