Goldman Sachs analysts predict big tech companies will invest over $500 billion in AI-related capital expenditure by 2026, focusing on data center hardware like AI accelerator chips and high-bandwidth memory devices. This contrasts with low profits in consumer-facing software, making investments in companies like Micron Technology and Broadcom attractive for maximizing returns.

Micron Technology’s stock has surged over 300% in the past year due to increased demand for its memory hardware driven by AI needs. Despite historical underperformance due to commoditized products, Micron is benefiting from generative AI trends, with revenue up 57% in the first quarter. With a low forward P/E ratio, Micron’s stock may still have room for growth.

Broadcom offers custom chips that provide cost-effective solutions for AI workloads, securing partnerships with industry leaders like OpenAI and Google. The company’s fourth-quarter revenue increased by 28% year over year, driven by demand for custom chips and Ethernet AI switches. With a forward P/E multiple of 31, Broadcom’s shares are positioned well for capturing market share in the AI industry.

Investors considering Micron Technology should note that it didn’t make the Motley Fool Stock Advisor’s list of the top 10 stocks to buy now. The report highlights stocks with potential for significant returns, emphasizing the importance of staying informed and being part of an investing community. Stock Advisor’s historical average return outperforms the S&P 500, showcasing the benefits of strategic investing decisions.

Read more at Nasdaq: 2 Millionaire-Maker AI Stocks to Buy in February