The AI Chip War: A Look at the Unexpected Winners of the Next 5 Years

Key Points

• Qualcomm is already in the mobile AI processor market, positioning it for the price-driven growth that’s brewing.

• Next-generation artificial intelligence data centers will require next-generation hardware beyond newer and better processors.

• As AI increasingly gets put to practical use in the real world (outside of data centers), the world will need tech from NXP Semiconductors to turn information into action.

• 10 stocks we like better than Qualcomm ›

There's little argument that chipmaker Nvidia (NASDAQ: NVDA) has been the biggest beneficiary of the advent of artificial intelligence (AI). Its processors are the centerpiece of most of the world's AI computing platforms, and artificial intelligence-related products now account for the vast majority of Nvidia's sales. That's why the stock's up more than 1,200% for the past five years, in step with the company's revenue growth.

The next five years aren't likely to look quite like the last five, though. The AI industry is maturing, and so are Nvidia's competitors. Indeed, even AI data center operators are now looking for very specific solutions for their unique needs. Names other than Nvidia will benefit from this ongoing evolution.

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With that as the backdrop, here's a rundown of three underestimated AI chip companies that could thrive on this change over the course of the coming five years.

Image source: Getty Images.

1. Qualcomm

To-date, nearly all the generative AI work being done by platforms like OpenAI's ChatGPT or Google's Gemini is remotely handled in the cloud -- most computers and mobile devices just aren't up to the power-intensive, heavy-duty computing load. Apple's newest iPhones and some of Microsoft's Surface laptops are purpose-built exceptions with powerful-but-pricey processors built in.

Like most everything else within the technology arena, however, time will lower the cost of AI-capable mobile processors. It won't be Apple supplying them for non-iPhone users, though. It will very likely be Qualcomm (NASDAQ: QCOM) providing chips to consumer technology companies looking for ways to empower customers with affordable on-board AI.

It's already happening, in fact. Qualcomm's Snapdragon® 8 Gen 3 chipset, introduced in October of 2023, was the "first mobile platform designed with Generative AI in mind." A year later, several smartphone makers were using this powerful processor even before the software that makes use of this generative AI capacity was really ready for everyday use. Notably, Microsoft has opted to use Qualcomm's newest Snapdragon processors in several of its AI-capable business laptops.

It's not a major market just yet, but it's getting there. With a well-developed product already leading in this space, look for Qualcomm's high-performance mobile processors to feature prominently among the sizable mid-priced segment of the growing mobile/onboard AI processor business.

2. Marvell Technology

Mobile processors are only a small part of AI's future, of course. Dedicated data centers will still handle the lion's share of this work, with most of it being done for developmental and business purposes like pharmaceutical research or optimizing supply chains.

Next-generation AI, however, will require next-generation data center hardware. And not just next-gen processors. Everything else that turns a wall of motherboards into a true neural network must be better as well.

Enter Marvell Technology (NASDAQ: MRVL).

It makes processors, although that's not going to be its chief contribution to the effort or its chief profit center. Marvell also makes a range of other tech, like digital signal processors, switches, computer memory accelerators, and other solutions that make data center architecture faster, and therefore more powerful. Its flagship CXL (Compute Express Link) devices, for instance, can dramatically expand the amount of RAM that can be connected to a data center's current motherboards, extending this tech's useful life, and ultimately lowering equipment costs. Moreover, Marvell can customize much of its technology to meet a particular customer need.

And the opportunity is enormous. Industry research outfit Technavio says the global AI data center market is set to grow at an average annualized pace of nearly 29% through 2029.

Analysts are on board, too, by the way. In spite of the stock's relative weakness since early this year, the vast majority of the analyst community considers MRVL stock a strong buy, with a consensus target of $91.28, which is about 30% above the ticker's present price.

3. NXP Semiconductors

Finally, add NXP Semiconductors (NASDAQ: NXPI) to your list of AI chip stocks that could be surprising winners between now and 2030.

You probably won't find any NXP-made technology in a data center anytime soon, if ever; the company's willingly left that business to others. AI, however, is increasingly making its way out of data centers and into the real world, where it's put to practical use. Cases in point: Autonomous vehicles and robotic warehouses. Both solutions rely on narrowly focused but very effective machine learning.

That's the sort of solutions that NXP Semiconductors brings to the table, although it casts a very wide net. For instance, its i.MX RT700 mini neural processing unit paired with NXP's eIQ Neutron NPU AI/ML accelerator turns wearables, smart home devices, and even portable medical tech into true AI "edge computing" products. At the same time, the company makes advanced driver assistance systems (ADAS) equipment, industrial automation solutions, and more. Not all of what it makes is AI-driven, to be clear. But a growing amount of it is, and will continue to as the world continues to use more and more AI outside of data centers.

That's what analysts seem to be expecting anyway. After last year's economics-driven lull bled into this year, pros are calling for rekindled revenue growth to push this year's likely top line of $12.36 billion to a record of nearly $15 billion in 2027. Earnings are expected to improve at an even faster clip.

And it's perhaps this likely earnings growth that makes NXP such a compelling investment prospect right now. Priced at only about 16 times next year's expected earnings of $14.07 per share, this stock is unusually cheap compared to most of its technology peers.

The kicker: NXP pays a decent dividend too ... at least by tech stock standards. Newcomers will be stepping in while its forward-looking yield stands at just under 1.8%.

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James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Qualcomm. The Motley Fool recommends Marvell Technology and NXP Semiconductors and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.