3 Chip Designers That Could Make Investors a Fortune

I think the best-positioned companies in the artificial intelligence (AI) build-out are the chip designers. These are companies that design chips but have no hand in manufacturing. This allows them to scale up and down as necessary, and they only have to worry about making the best product possible and ensuring their suppliers produce what's necessary.

Should AI demand deteriorate, this protects these companies from having too much invested in production facilities. However, AI demand is still rising, and it could continue to do so for some time.

I've got three companies that can take advantage of this trend, and even though they've all been great performers so far, they still have massive upside potential ahead.

Image source: Getty Images.

1. Nvidia

Nvidia (NASDAQ: NVDA) is the chief chip designer, and its GPUs are the primary computing unit of choice for nearly every AI hyperscaler. GPUs are flexible, accelerated computing nodes that can handle a wide variety of workloads, giving them an advantage over custom AI chips designed around a specific workload. Nvidia GPUs hold the largest market share in the AI computing realm by far, and this has boosted Nvidia all the way to the top to become the world's most valuable company.

While Nvidia's run has been impressive, it's far from over. Management believes that global data center capital expenditures will rise to $3 trillion to $4 trillion annually. Considering the big four AI hyperscalers are planning on spending around $650 billion this year, that's a major jump. However, that's a global figure and doesn't include many of the upstarts like OpenAI and Anthropic.

The future is bright for Nvidia and its peers, and it's not too late to invest to reap the benefits.

2. Broadcom

As mentioned above, one of the rising alternatives to Nvidia GPUs is custom-designed AI chips. The idea behind these is to tailor them to a workload to maximize cost efficiencies. Still, many AI hyperscalers don't have the expertise necessary to produce custom AI chips, which is where Broadcom (NASDAQ: AVGO) comes in. By partnering with Broadcom, AI hyperscalers have a direct line for everything necessary to design and produce their own chips, and the market for these is expected to boom over the coming year.

Multiple clients have custom AI chips near launch, which should drive Broadcom's custom AI chip revenue to over $100 billion in 2027. For reference, Broadcom's company-wide revenue over the past 12 months was less than $70 billion, and AI chips were only a fraction of that total.

Broadcom is positioned to take advantage of this market shift, making it a smart investment.

3. Amazon

Many companies partner with Broadcom because they don't have the design and production expertise necessary to bring a custom AI chip to life. Amazon (NASDAQ: AMZN) didn't use Broadcom for its chips; it just went out and hired the necessary talent to do it. Amazon's custom AI chips are thriving and are growing at a triple-digit rate.

Furthermore, the demand is so high for its products that its third-generation chip, which started shipping at the start of 2026, has nearly all of its capacity spoken for. It's fourth generation, not due out for another 18 months, and has most of its computing capacity already spoken for.

Amazon's custom chip business dovetails nicely into its leading cloud computing platform, Amazon Web Services (AWS). By keeping all of these businesses within one unit, rather than partnering with another, it's maximizing its profits. Because cloud revenue is rising, this makes Amazon the most stable investment pick of the three, and if AWS revenue continues to climb, so will Amazon's stock price as a result.

Keithen Drury has positions in Amazon, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Amazon, Broadcom, and Nvidia. The Motley Fool has a disclosure policy.