2 Artificial Intelligence (AI) Stocks to Buy as Demand for Custom Chips Soars
Yahoo Finance ·
According to some reports, Amazon ( AMZN +2.44% ) is in early talks to sell Trainium, a line of ASICs (Application-Specific Integrated Circuits) -- or custom chips designed to handle specific tasks. The fact that Amazon is exploring selling Trainium to other data centers, even though it has only used it in-house so far, suggests that demand for custom AI chips is rising. And if that's the case, it might not be such a bad idea to invest in stocks that could capitalize on this trend. Let's consider two leaders in this niche that may be worth investing in right now: Broadcom ( AVGO 3.39% ) and Marvell Technology ( MRVL 4.97% ) . Broadcom is one of the companies that could be a big winner from the rising demand for custom AI chips. The company already has several notable partners for whom it develops products. The list includes Alphabet ( GOOG 2.15% ) ( GOOGL 1.73% ) -- with whom it has a contract extending through the next five years -- Meta Platforms ( META +1.36% ) , and OpenAI . Broadcom is already cashing in on its work in this area: The company's revenue, earnings, and cash flow have been growing at a good clip. In the second quarter of its fiscal year 2026, which ended on May 3, Broadcom's revenue increased 48% year over year to $22.2 billion. The company's AI chip business grew much faster, posting sales of $10.8 billion, up 143% year over year. Broadcom's adjusted earnings per share increased 54% year over year to $2.44. The company's guidance also seemed strong: Broadcom predicted an over 200% year-over-year increase in its AI chip business for Q3.
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