AI Infrastructure Spending Could Nearly Triple by 2029. Here Are 2 Stocks to Buy.
Key Points
Statista expects AI infrastructure spending to reach $902 billion by 2029.
Nvidia is the default provider for the essentials -- GPUs, rack systems, and networking -- with a strong demand outlook.
Power is the bottleneck in AI, putting Iren's data centers in a lucrative position.
- 10 stocks we like better than Nvidia ›
Big tech is still pouring billions into the data centers powering artificial intelligence (AI) -- and the spending wave doesn't appear to be peaking anytime soon. Statista projects AI infrastructure investment will climb to $902 billion by 2029, up from $334 billion in 2025.
Even after strong runs, some of the market's biggest AI winners, including Nvidia (NASDAQ: NVDA) and Iren (NASDAQ: IREN), are priced in a way that could still leave room for meaningful upside over the next five years. Here's why both stocks remain compelling buys today.
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Nvidia
Data center spending is expected to rise sharply in 2026, according to The Motley Fool's research. This means more demand for the chips that power AI workloads, and that's a direct tailwind for the leading supplier of graphics processing units (GPUs). Nvidia's innovation in GPUs, complete rack systems, and software has made it a cornerstone of the AI infrastructure build-out.
Nvidia's data center business accounted for more than 90% of its revenue last quarter and grew 75% year over year. Its leadership in this market is evident in its high margins, where it generated an impressive $120 billion in net income on $215 billion in revenue last year.
Nvidia's Blackwell GPUs have been in such high demand that even their six-year-old Hopper-generation chips have been sold out. CEO Jensen Huang said they see $1 trillion in cumulative purchase orders for Blackwell and its next-generation Rubin chips through 2027.
All of that demand keeps Nvidia the default choice for new data centers. Take data center builder IREN, which is deploying Dell PowerEdge servers powered by Nvidia Blackwell GPUs and NVL72 racks. Nvidia is also seeing exploding demand for its networking products, including InfiniBand, Spectrum-X Ethernet, and NVLink systems, which cement the company's lead as a critical supplier to the AI infrastructure build-out.
For long-term AI investors, Nvidia still looks like one of the best buy-and-hold investments to benefit from the AI boom even after its monster run. The main risk is that data center spending has historically come in waves, with slowdowns like 2018 and 2022. Each episode caused the stock to fall by more than 50% from its peak.
Still, Nvidia trades at about 16 times next year's earnings estimate, and analysts expect earnings to grow around 38% annually in the years ahead -- a setup that could still deliver meaningful upside over the next five years.
Iren
To build new data centers, chips are only half the equation. A growing bottleneck is securing sufficient power to run the data centers now under construction. Next-gen chips will require multigigawatt campuses to support thousands of Nvidia's Rubin GPUs operating at once -- a major opportunity for Iren.
Iren is ahead of the curve. It has more than 4.5 gigawatts of secured power and a founder-led team that's focused on execution. It designs, builds, and operates its own data centers. The company is built to do everything in-house, including construction and design.
That vertical approach helps Iren stay on schedule, which matters to tech giants that need compute capacity fast. It has a $9.7 billion contract with Microsoft and expects to generate $3.4 billion in annualized run rate revenue by the end of 2026.
The stock has soared over the past year, but there is still substantial long-term upside. Its 2026 annualized revenue target represents only about 10% of Iren's secured power capacity.
There are risks related to how these projects will be financed and whether additional share issuance could dilute returns. But that's why the founder-led team is central to the thesis. Co-founders Daniel and Will Roberts focus on creating long-term shareholder value, and each owns a meaningful stake, aligning their interests with shareholders.
The stock's valuation already prices in strong growth, but the current $13 billion market cap leaves room for more upside as Iren signs more hyperscaler deals. With only a small part of its data center pipeline monetized today, Iren could offer attractive returns over the next five years and beyond.
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John Ballard has positions in Iren and Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool has a disclosure policy.
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