AI Stocks Climb Amid Stargate Buzz: Who’s the Next Nvidia?
TradingKey - On Wednesday, President Donald Trump’s new AI initiative sent Oracle shares soaring, closing up 7%, while Arm Holdings gained 16%. The bullish momentum extended to other AI-related stocks, with Nvidia rising 4%. According to the latest FactSet data, the iShares Semiconductor ETF also surged, bringing its year-to-date gains to over 10%.
Source: Factset, Barron’s
President Trump announced a major investment in AI infrastructure, tasking OpenAI, SoftBank Group Corp., and Oracle to form a joint venture called Stargate, focused on data centers and other infrastructure projects.
Trump described Stargate as “a new American company that will invest $500 billion at least in AI infrastructure in the United States,” and promised it would create over 100,000 U.S. jobs.
“What we want to do is we want to keep it in this country. China is a competitor, and others are competitors,” he said. “It’s technology and artificial intelligence all made in the USA.”
Why Is the Stargate Initiative Key for Nvidia?
Investors have been closely watching Nvidia as it ramps up production of its new Blackwell chips, with attention focused on the upcoming quarters. Melius Research analyst Ben Reitzes noted that the newly announced Stargate could drive $500 billion in AI infrastructure investment over the next four years, “sure puts the Blackwell transition in perspective.”
According to his estimates, over $100 billion of Stargate’s planned spending is likely to flow to Nvidia, with additional funds benefiting Broadcom and Arista Networks, which are also involved in computing and networking.
Searching for the Next Nvidia Along the AI Value Chain
While investors remain highly optimistic about the AI industry, Nvidia’s valuation has reached steep levels. The AI value chain encompasses not only GPU/CPU developers like Nvidia, AMD, and Intel but also other manufacturers across various segments.
TradingKey analysts have identified several noteworthy companies in the AI industry that merit investor attention.
Energy Stocks: May Be a Smart Choice for Investors
Oracle’s Larry Ellison announced that 10 data centers are already under construction in Texas, with more planned.
Artificial intelligence demands vast energy resources to power its enormous computational capabilities, driving increased demand for specialized data centers and the electricity to fuel them.
Investors are increasingly bullish on nuclear energy companies, which stand to benefit from the growing power needs of AI data centers. Stocks like Vistra and Constellation have been among the best performers over the past 12 months, with gains of 366% and 182%, respectively. Over the past year, the energy sector has seen a wave of deals, with major tech companies partnering with nuclear power firms to supply electricity for their future data centers.
Source: S&P Global, Tradingkey.com
“We see further growth driven by power market upside, datacenter/hyperscaler deals further improving the overall business mix, cash flow profile,” the team led by Shahriar Pourreza wrote.
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