A Spot of AI: Stocks for the Long Haul

The current enthusiasm for artificial intelligence, you see, is not merely a passing fancy, like a craze for collecting porcelain thimbles. It’s a positively ripping good thing for the infrastructure market, and a chap with a bit of foresight can find himself in a rather advantageous position. One must, naturally, be discerning. So, let us consider a pair of stocks, suitable for holding onto for the next decade, or until something dashedly more exciting turns up.

Broadcom – A Most Useful Fellow

Now, Broadcom (AVGO 3.38%) is a particularly bright spark in this whole affair. The AI infrastructure, as previously mentioned, is booming, and shows no signs of slowing down – rather like a runaway train full of eager investors. What’s more, the increasing importance of data center networking, as these AI chip clusters swell in size, presents a golden opportunity. It seems everyone is suddenly keen on creating their own custom AI chips, you know, to save a few bob. A sensible move, one might think.

The long and short of it is, as the inference market begins to outpace training – a bit like a tortoise finally overtaking a hare – AI ASICs (application-specific integrated circuits) are poised to take a larger slice of the pie, wresting it away from the current favourite, the GPU. A bit of healthy competition, what?

This is, naturally, splendid news for Broadcom. They’re top of the heap when it comes to data center networking, with their Tomahawk Ethernet switch being the bee’s knees in AI data centers. And then there’s their involvement with Alphabet’s tensor processing units (TPUs) – a remarkably clever bit of kit, if I may say so. Alphabet seems determined to build out its AI infrastructure with gusto, and is even letting other chaps use these chips for their own AI adventures. Anthropic, for example, has placed a rather substantial order – a cool $21 billion worth of TPUs, to be delivered this year. OpenAI, too, is collaborating with Broadcom on developing their own custom AI chips. A veritable hive of activity, you see.

Between networking and these custom AI chips, Broadcom presents one of the most promising growth opportunities in the AI space for the coming decade. A thoroughly sound investment, wouldn’t you agree?

Taiwan Semiconductor Manufacturing – A Steady Hand

Now, let us turn our attention to Taiwan Semiconductor Manufacturing (TSM 1.55%). They’re the leading manufacturer of chips in the world, with a near monopoly on making the advanced sort. While competitors have been struggling to achieve decent yields – a bit like trying to bake a perfect soufflé in a gale – TSMC has become the go-to partner for chip designers. They’re working hand-in-glove to increase capacity and meet the surging demand. Best of all, they benefit from both the GPU and AI ASIC growth. A truly enviable position, wouldn’t you say?

TSMC’s position in the industry has also given them a rather firm grip on pricing, which has helped to boost their gross margins. Reports suggest they’ve already informed customers of a four-year price hike schedule. A bold move, but a sensible one, I daresay. Between boosting capacity and increasing prices, TSMC looks poised to be a long-term winner in the AI infrastructure game. A most reliable chap, indeed.

2026-02-13 02:42

Broadcom – A Most Useful Fellow

Taiwan Semiconductor Manufacturing – A Steady Hand

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