Semiconductors are often referred to as the “picks and shovels” and enablers of AI. They are the foundation on which the technology resides. Therefore, related stocks figure prominently in the AI investment thesis. And that fact is unlikely to change anytime soon.
Astute investors know as much. But it can still be tricky selecting individual chip stocks. And that’s particularly sp for some market participants who went venturing beyond familiar fare such as Broadcom (AVGO) and Nvidia (NVDA). Fortunately, the Invesco QQQ Trust (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ) are full of semiconductor equities. And many of them have direct AI exposure.
For example, Nvidia and Broadcom, the two dominant U.S.-based names regarding AI chips, combine for nearly 13% of the QQQ/QQQM portfolios, confirming the ETFs are solid starting points for investors seeking broad exposure to the enablers side of the AI trade.
AI Chipmaker Outlook: Buoyant
Owing to its dominant perch in graphics processing units (GPUs), Nvidia is one of the most discussed AI stocks, chips or otherwise. And while some questions linger about its lofty multiples, the stock has notable long-term potential.
“We still anticipate tremendous spending on AI accelerators moving forward, although US tariffs add uncertainty to our assumptions. Nvidia NVDA should also maintain dominance in AI GPUs this year,” according to Morningstar. “Nvidia’s GPU revenue will rise more than 30 times in just six years. Plus, the firm commands impressive pricing power on its data center products—reaching gross margins as high as 78%.”
Likely bolstering the long-term case for AI adoption — facilitated by some of the chip stocks dwelling in QQQ and QQQM — is that the technology intersects with other disruptive technology. That includes cybersecurity. Estimates indicate there’s long-term opportunity for investors regarding the AI/cybersecurity union.
“Although the AI security market is small right now, we expect rapid growth as the use of applications proliferates. And for good reason—our recent cybersecurity report suggests that the cost of a data breach is almost 50% higher for companies not using AI security compared with those that leverage these tools,” added Morningstar.
The research firm added that QQQ/QQQM component Marvell Technology MRVL is its top pick in the generative AI space. It said that future growth is priced into shares of Broadcom and Nvidia. But it noted that duo, along with Marvell, fit the bill of high-quality, wide moat names.
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