I'm Not Buying Nvidia Right Now. These 2 Growth Stocks Are the Smarter AI Supercycle Play.

Nvidia (NASDAQ: NVDA) has undeniably been one of the best growth stocks to own over the past several years. The company has seen parabolic growth over the past five years and has established itself as the dominant player in the artificial intelligence (AI) infrastructure space.

The company did not just stumble into the position it finds itself today, but it was carefully plotted and planned for years before AI hit the mainstream. It is that forward-looking nature that I believe will continue to make Nvidia a winner moving forward.

While it is already the largest company in the world, I think there are better ways to play this AI supercycle right now. Let's look at two AI stocks I have bought instead.

1. Advanced Micro Devices

Advanced Micro Devices (NASDAQ: AMD) is the distant No. 2 player to Nvidia in the graphics processing unit (GPU) market; however, it is at the convergence of two important trends: inference and agentic AI.

The first phase of AI was all about providing the muscle to train large language models (LLMs). This is why Nvidia, with its GPUs and CUDA software platform, where most foundational AI code was originally written, has dominated the market. However, inference, where AI models draw on what they've been trained on, is projected to become a much larger part of the market. Inference is not nearly as technically demanding as training, and thus AMD has been able to carve a niche in this area.

AMD has recently made important progress when it locked in partnerships with OpenAI and Meta Platforms for its GPUs. While the deals included warrants for up to 10% of AMD's stock, it opened the door for it to meaningfully become a part of the inference roadmap for two of the largest AI data center spenders, while also incentivizing them to help AMD succeed. These two deals should help drive strong growth in the coming years.

That said, AMD's opportunity in inference is not the main reason I bought the stock. The biggest reason is that the company is very well-positioned to benefit from the next big AI bottleneck: central processing units (CPUs). With the rise of AI agents, data centers are going to need considerably more high-performance CPUs to provide the sequential logic they need to run.

Demand for high-performance CPUs is starting to surge, and the market is already becoming supply constrained. Amazon recently said it has customers who have asked to buy its entire supply of custom Graviton CPUs, but that it's had to turn them down. As the leader in the CPU server market, AMD will be a prime beneficiary of this trend, and best of all, it's just starting.

Image source: Getty Images.

2. Broadcom

While AMD is starting to chip away at Nvidia in the inference market, the biggest winner in this space will likely be Broadcom (NASDAQ: AVGO). The company is a leader in application-specific integrated circuit (ASIC) technology, where it helps customers design custom chips hardwired to handle specific tasks. Because these chips are built to handle one job and aren't programmable like GPUs, not only do they tend to do this job very well, but they are also much more energy efficient. This becomes particularly important when it comes to inference, which is an ongoing cost.

Broadcom helped Alphabet develop its highly successful Tensor Processing Units (TPUs), and the two companies recently extended their partnership for another five years. Meanwhile, Alphabet is now starting to provide these chips to more external customers, which is set to be a big growth driver for Broadcom as well. It will already supply Anthropic with $21 billion worth of TPUs this year, and Anthropic just signed a deal for more TPU deployments starting in 2027.

Broadcom is also working with other large hyperscalers on their own custom AI chips, including OpenAI and Meta. It has talked about its custom AI chip revenue soaring to $100 billion alone in fiscal 2027, before the most recent Anthropic deal. It also has a fast-growing networking business that is benefiting from larger chip clusters.

The new big AI winners

AMD and Broadcom are riding some of the biggest trends in AI right now, which is why I think they can outperform Nvidia in the coming years. However, I think all three are great ways to play the AI infrastructure boom.

Geoffrey Seiler has positions in Advanced Micro Devices, Alphabet, Amazon, Broadcom, and Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.