Shares of many artificial intelligence (AI)-related semiconductor names were moving higher on Wednesday, including Broadcom (NASDAQ: AVGO), Lam Research (NASDAQ: LRCX), and Monolithic Power (NASDAQ: MPWR), which were up 2.6%, 4.1%, and eight.5%, respectively, as of 1:12 p.m. ET.
These weren’t the one three AI-related chip stocks rising today, but this group does showcase a relatively broad spectrum of products, from Broadcom’s AI networking chips, to Lam’s etch and deposition equipment for advanced chipmaking, to Monolithic’s AI power modules.
The news lifting all boats within the sector likely needed to do with yesterday’s announcement of the Stargate data center project by President Donald Trump and a number of other AI technology corporations.
Yesterday, a bunch of technology corporations, including Oracle, Softbank and OpenAI, gathered on the White House to announce Stargate. Stargate is an AI-related three way partnership, bringing these corporations and other investors together to construct out next-generation AI infrastructure within the U.S.
The announcement can have spurred a rally in AI-related chip stocks resulting from the financial figures the group touted. The businesses announced an initial $100 billion investment, but in addition threw out a $500 billion figure because the potential for future latest Stargate expansions over the subsequent 4 years.
On condition that none of those corporations make their very own chips — a minimum of not yet — that stunning figure likely means numerous Nvidia GPUs. Yet even when Stargate primarily uses Nvidia GPUs and never custom ASICs, which Broadcom makes, Stargate will still likely use Broadcom’s Tomahawk and Jericho network switching and routing chips. Furthermore, all leading-edge semiconductors and memory today require intense etch and deposition steps, which might profit semiconductor equipment generally and Lam Research specifically, which leads in these crucial chip manufacturing categories.
Meanwhile, these massive data centers would require huge amounts of power, and Monolithic Power provides the 48 volt power management systems utilized by many AI chip modules. While there was some debate as as to whether Monolithic Power can have lost its dominant share inside Nvidia chip modules — a priority that caused Monolithic stock to plunge late last yr — it should still retain a key share of those AI power module systems. The truth is, sell-side analysts at Oppenheimer just named Monolithic as considered one of the firm’s top AI stocks for 2025.
While these stocks should climb on continued AI investment news, the Stargate announcement by itself should not be this much of a game changer. In any case, the initial $100 billion includes money already spent on a Texas data center in progress that began last yr under the Biden administration. So, Stargate doesn’t look like a wholly latest AI cluster, but relatively a mere augmentation of 1 already underway.