US President Donald Trump announced a $500 billion artificial-intelligence initiative called Stargate, in collaboration with Oracle SoftBank and OpenAI.
The joint venture will allow Nvidia maintain its leadership in the AI market. However, other chip stocks may also benefit from the project.
Vijaho analyst Vijaho Rakesh says that these include Broadcom Micron and Arm Holdings.
Broadcom Inc (NASDAQ: AVGO)
Mizuho analyst believes Broadcom will be a major beneficiary from Stargate.
Trump’s artificial-intelligence project, he believes, could increase the demand for AVGO’s products and expand its market.
Rakesh, in a recent report, argued that Broadcom was focused on building its chip. This makes it well positioned to profit from the joint venture. “$40-50B of the $500B spent by OpenAI by 2027-2028E could be on custom-made silicon as we move further into the project timeline.”
Broadcom may also benefit if Meta Platforms keeps its promise to spend more on artificial-intelligence in 2025. AVGO shares are up by more than double since 2024.
Micron Technology Inc. (NASDAQ: MU).
Vijay Rakesh believes Micron will benefit from the AI joint venture mentioned above, as it could increase the demand for storage and connectivity over the next few decades.
Stargate’s commitment to AI technology advancement and its focus on building massive data centers could lead to a significant increase in demand for high-performance memory.
Micron Technology, which has grown by nearly 20% in the last year, is a good example.
It will likely play an important role as a provider of the hardware required to power the said artificial-intelligence initiative. According to the Mizuho Analyst, investors should also own MU shares by 2025, for a 0.45% yield.
Arm Holdings Plc NASDAQ: ARM
Arm’s shares have been falling in recent sessions, but Mizuho sees this as an opportunity to buy more of its shares. After all, the chip design company is at the heart Trump’s Stargate.
The AI initiative is likely to give a major boost in demand for graphic processor units (GPUs), and networking designs, areas where Arm excels.
Rakesh says that the Stargate project of the president could result in up to $200,000,000 in additional royalty revenue for Arm from these two areas.
Stocks of Arm are attractive because they made a profit during their latest reported quarter. The company’s management had given a revenue guidance of up $4.1 billion, with an adjusted earnings per share range of $1.45 to $1.65.
Arm shares aren’t cheap to own, after more than tripling since its IPO of $54 per share.
This post Trump’s $500 Billion AI Initiative Will Benefit These 3 Chip Stocks Other Than Nvidia first appeared on The ICD
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