AI Data Center Capex Surge Expected to Boost Key Stocks

Capital expenditures (capex) in the artificial intelligence (AI) data center sector are expected to surge, significantly impacting multiple technology stocks. Analysts predict this increase will benefit a wide range of companies involved in the data center supply chain.

AI Data Center Capex Surge: Analysts’ Insights

According to BNP Paribas analyst Karl Ackerman, tech giants like Alphabet, Meta Platforms, and Microsoft are increasing their investments in AI infrastructure. This heightened spending indicates a broader positive trend for many businesses beyond just AI chip manufacturers.

Beneficiaries of Increased Spending

Ackerman highlighted several companies poised to gain from the expanded capex in AI data centers:

• Arista Networks (ANET)
• Broadcom (AVGO)
• Celestica (CLS)
• Ciena (CIEN)
• Coherent (COHR)
• Credo Technology (CRDO)
• Fabrinet (FN)
• Lumentum (LITE)
• Micron (MU)
• SanDisk (SNDK)
• Seagate (STX)
• Western Digital (WDC)

This group includes networking and storage gear manufacturers, memory chip producers, and contract manufacturers. Ackerman believes the rising capex trend will positively affect the entire tech ecosystem.

Further Analysis on Tech Hardware Companies

Evercore ISI analyst Amit Daryanani also noted the beneficial implications of AI-related capex for several tech firms. In his analysis, he mentioned:

• Amphenol (APH)
• Arista
• Ciena
• Dell Technologies (DELL)
• Seagate
• Vertiv (VRT)
• Western Digital

These companies are viewed as having either high or medium exposure to the increasing capex directed towards AI technologies.

Stock Evaluations and Forecasts

Several analysts have adjusted their price targets for AI-related stocks in light of these developments. Evercore’s Mark Lipacis recently raised targets for firms such as:

• Astera Labs (ALAB)
• AMD
• Arm Holdings (ARM)
• Broadcom
• Nvidia

JPMorgan’s Samik Chatterjee highlighted that capex reports from major players like Google will create a positive impact for AI infrastructure-related companies.

Summary of Key Stocks in AI Capex

JPMorgan’s Harlan Sur and Barclays’ Tim Long reiterated the importance of increased capex for various companies, specifically mentioning:

• AMD
• Astera Labs
• Broadcom
• Macom Technology Solutions (MTSI)
• Marvell Technology (MRVL)
• Micron
• Nvidia
• Western Digital

As these companies position themselves to leverage the rapidly growing AI market, analysts anticipate substantial growth opportunities driven by increased capital investments in AI data centers.