The latest Nvidia earnings have pushed AI data centres back into the spotlight, with Q2 revenue of $96b and data centre sales of $89b reminding investors how much money is now chasing compute power. That surge in attention can create powerful momentum and pockets of over enthusiasm. This article looks at three stocks whose businesses are closely linked to this AI build out, and why their exposure to this story matters for a diversified portfolio strategy.
The three stocks covered below are only a sample of what investors are watching around AI infrastructure. The full screen on Simply Wall St has surfaced 66 more companies with business descriptions that point to equally compelling data centre and AI related narratives. To see the wider field and identify which ideas best fit your own conviction, head straight into the Global AI Data-Center Growth Beneficiaries screener to filter the list, analyze fundamentals, and focus on the AI data centre beneficiaries that match your approach.
Monolithic Power Systems (MPWR)
Monolithic Power Systems is a US$64.1b semiconductor company that designs power management chips used to convert and control electricity inside cloud and on premises servers, AI systems, storage, and a wide range of other electronics. This ties it directly into the rising power needs of AI data centers. The business currently reports all of its US$3.3b revenue under semiconductors, reflecting a focused model supplying power electronics solutions across storage and computing, enterprise data, automotive, communications, consumer, and industrial markets. For investors, that scale and single core segment underline how closely the company’s fortunes are linked to demand for efficient, high density power delivery across AI and broader computing infrastructure.
Investors looking at the AI data center build out often focus on GPU vendors like Nvidia, but Monolithic Power Systems is one of the companies helping those chips actually run inside hyperscale facilities. Its power management ICs and full power solutions are used in servers, AI accelerators and storage, and recent commentary has highlighted new shipments into ASIC based AI products and strong enterprise data demand tied to AI infrastructure. At the same time, the stock trades on a premium valuation and has seen profit margins come down from much higher levels, with insider selling and reliance on external funding worth monitoring. That mix of strong AI exposure, healthy returns and higher expectations is exactly why this company deserves a closer look later in the article.
Monolithic Power Systems sits where AI power demand, premium pricing and falling margins intersect, yet most attention still goes to GPU vendors. Get the fuller picture, including valuation pressure and insider moves, in the analysis report for Monolithic Power Systems
MACOM Technology Solutions Holdings (MTSI)
MACOM Technology Solutions Holdings is a US semiconductor company that builds the analog, RF, microwave and lightwave chips that move data inside and between data centers, which links it directly to rising AI bandwidth needs. It generates about US$1.2b in revenue from designing, manufacturing and marketing semiconductors and modules for data centers, carrier infrastructure, industrial, defense and telecom customers across the United States, China and the wider Asia Pacific region. With a market cap of roughly US$20.3b, MACOM sits firmly in the mid to large cap bracket that many investors use as a core way to gain exposure to AI infrastructure demand.
Investors watching Nvidia’s latest AI surge may want to keep MACOM in view, because its high speed optical and RF components are part of the plumbing that lets AI accelerators talk to each other across data centers. Earnings calls through 2025 and 2026 reference record data center bookings, a rising backlog and margin progress as capacity ramps, which together indicate that the company is leaning into this demand rather than just riding headlines. The trade off is that expectations are already high, with rich valuation metrics and dependence on volatile end markets such as data center and telecom that can amplify any slowdown in AI or 5G spending. If you are weighing that balance of opportunity and execution risk, MACOM’s mix of AI linked growth drivers, long experience in RF and optical semis, and ongoing fab investments makes it a company that may warrant more detailed research before you decide how it fits your portfolio.
MACOM’s accelerating AI order book and rich pricing have investors focused on upside, while underestimating what could shift sentiment next. Get the full context in the 3 key rewards and 1 important warning sign
Infineon Technologies (XTRA:IFX)
Infineon Technologies is a €71.6b semiconductor company that supplies the power and industrial chips that help run servers, power supplies and energy efficient infrastructure in data centers, which ties directly into the Global AI Data Center Growth Beneficiaries theme. It generates about €7.5b from Automotive products, €5.0b from Power & Sensor Systems that includes data center power and sensing, €1.7b from Green Industrial Power and €1.4b from Connected Secure Systems across security and connectivity solutions.
For investors following Nvidia’s AI surge, Infineon Technologies offers a different angle on the same story. The company’s power and sensor chips feed into AI data centers, electric vehicles and industrial energy efficiency, backed by what many see as a healthy balance sheet and sizeable investment in new capacity such as the Smart Power Fab in Dresden. At the same time, a rich P/E, recent one off losses and funding that leans on external sources mean expectations are not low and any slowdown in AI or industrial demand could punish the stock. If you want exposure to AI infrastructure that is rooted in power electronics and long term megatrends, this is a company worth understanding in more detail before deciding how it fits your portfolio.
Infineon’s AI and power electronics story is accelerating. Yet many investors still focus on headline P/E and miss what really drives sentiment. Get the full risk and opportunity picture in the analysis report for Infineon Technologies
Seeking Alternatives Before Momentum Flies
Fresh themes can move quickly, and early entries often matter most. Before the next breakout gets caught by the crowd and prices start dropping, scan these ideas and consider acting soon.
- Spot income workhorses that aim to keep paying even when sentiment cools by running your filter across the 11 dividend fortresses while yields still look appealing.
- Track early AI momentum where profits already exist, not just stories, by reviewing the curated list of 74 profitable AI stocks that aren't just burning cash, which may still be flying under the radar for now.
- Target resilient balance sheets that can hold up when conditions shift by focusing on the curated list of solid balance sheet and fundamentals (51 results) while the crowd is still fixated on the headlines.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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