2 Pick-and-Shovel AI Stocks Powering the Data Center Boom

Artificial intelligence (AI) is driving a surge in technology infrastructure spending. While top semiconductor stocks have been the hot plays, Vertiv (NYSE: VRT) and Texas Instruments (NASDAQ: TXN) are falling somewhat under the radar for many investors.

Here's why both of these tech stocks look positioned for strong growth in the data center boom.

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Vertiv

As data centers pack in more computing power to support AI training and inference, chip density continues to rise. That pushes up heat and electricity demand, boosting demand for Vertiv's critical power management and cooling systems. In the first quarter, Vertiv reported net sales up 30% year over year (23% excluding currency and acquisitions).

The power and cooling market is competitive, but Vertiv has built an edge through service quality, long-term customer relationships, steady innovation, and a large global service network. And once this kind of equipment is installed, customers often stick with the same supplier.

That advantage is starting to show in profitability. Adjusted operating margin rose more than four percentage points to 20.8% last quarter, and management believes it can reach at least 27% over time.

Vertiv is positioned to maintain sales growth of around 20% or more in the AI boom. Based on The Motley Fool's research, the leading AI hyperscalers were expected to increase capital spending by at least 45% in 2026 -- a big tailwind for this data center supplier.

For 2026, company guidance calls for organic net sales to be up 29% to 31% over 2025, with adjusted earnings growing at least 50%. Analysts see improving margins driving roughly 32% annualized earnings growth over the next few years. If the company hits those targets, shareholders could be well rewarded.

Texas Instruments

Texas Instruments is a top supplier of analog power chips that regulate electricity flow -- exactly what data centers need as power density climbs. In the first quarter, revenue grew 19% year over year, but the real story was the 90% increase in data center revenue. Its advantage is a massive portfolio of more than 80,000 products, letting it serve a wide range of analog sockets across electronic devices, including server racks in data centers.

It could also achieve improving margins as it expands into specialized, application-specific parts -- something management expects to begin contributing meaningfully to financial results in the second half of 2026.

The biggest risk is the industry's usual cyclical swings in chip demand. Parts of Texas Instruments' business, such as automotive and personal electronics, can experience softness in a weak economy. But the data center opportunity is real and can contribute to the company's overall growth, as it just did.

It's telling that leading AI companies like Anthropic (Claude) and OpenAI (ChatGPT) are continuing to see surging usage of their AI models. That necessitates greater investment in chips and networking in data centers to accommodate the frequent use of these tools, which could ultimately benefit Vertiv and Texas Instruments.

Analysts forecast about 21% annualized earnings growth for Texas Instruments, but earnings rose 31% year over year in the first quarter, pushing estimates higher. That suggests Wall Street may still be underestimating the scale and duration of the AI infrastructure build-out, creating an opportunity in pick-and-shovel stocks like Vertiv and Texas Instruments.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Texas Instruments and Vertiv. The Motley Fool has a disclosure policy.