Big Tech Will Spend $745 Billion on AI This Year. These Stocks Get Paid on Every Dollar.

This year, major technology companies plan to invest approximately $745 billion in capital expenditures, with a significant portion directed towards data center infrastructure. Nvidia (NVDA), Broadcom (AVGO), and Arista Networks (ANET) are key suppliers of the compute, custom silicon, and networking components that convert these investments into revenue from AI cloud capacity.

Nvidia designs GPUs and related computing systems for AI training and inference workloads, while Broadcom's custom-designed chips pose a challenge to Nvidia's market dominance. Nvidia's CUDA software platform, used by over 7.5 million users, provides a competitive edge, particularly when combined with its hardware offerings like the new Vera Rubin platform.

The company's revenue more than doubled in the second quarter of fiscal 2027 (January), reaching $96 billion, with management forecasting a 70% growth in fiscal 2028. Custom chips might gradually erode Nvidia's GPU market share, but the company is countering this by expanding partnerships with non-hyperscaler customers, including enterprises and industrial opportunities.

Nvidia's stock is currently valued at a forward P/E of approximately 14 times, considering its strong momentum.

Broadcom's AI chip revenue is growing at a faster rate than Nvidia's, up 221% year over year in the fiscal third quarter of 2026. The company designs custom AI accelerators and high-speed networking components, with AI revenue expected to increase from $58 billion this year to $230 billion by fiscal 2028. Broadcom's CEO anticipates AI revenue growth, but the stock trades at a modest forward P/E of 18 times next year's earnings estimates, reflecting potential hurdles.

Meanwhile, Arista Networks supplies interconnect and networking gear for data centers, with its EOS operating system providing a competitive advantage. The company's revenue surpassed $3 billion for the first time in Q2 2026, growing 38% year over year. Arista's high-performance Ethernet switches, or AI fabrics, now span over 100 companies, including big hyperscalers, specialized cloud providers, AI labs, and enterprises.

Risks include deployment delays due to increasingly complex AI data centers. Arista's deferred revenue was about $6.9 billion in Q2 2026, but management expects continued growth, with the stock trading at roughly 38 times next year's earnings estimates, a steeper premium than Nvidia and Broadcom.