The AI arms race still seems to be in play as the great AI data center buildout moves ahead, while demand for AI “compute” remains off the charts. With Nvidia (NASDAQ:NVDA | NVDA Price Prediction) top boss Jensen Huang taking to the stage for the annual GTC conference, there’s sure to be a lot of action in the AI scene, especially after a fairly turbulent start to the year for many of the names that are stuck at the pitstop after a heated past two years.
With Huang pointing to $1 trillion in Vera Rubin and Blackwell orders through 2027, it still feels like there’s room for a surprise to the upside when it comes to the insatiable demand for AI computing. Of course, such a comment should have probably sent shares of Nvidia off to the races.
After all, that’s a jaw-dropping figure for the number-one “picks and shovels” play in the entire AI trade. While Nvidia stock did march just north of 1% higher on the day, I do think the reaction was quite muted. Indeed, Jensen Huang’s bullish and upbeat commentary about the AI scene at large might not have as much of an impact in 2026.
Have valuations finally caught up to the broad basket of AI plays? Or is the market just in a bit of a digestion phase? It’s impossible to tell. Either way, it’s worth broadening one’s horizons to see what’s out there as valuations start to come in a bit.
In this piece, we’ll check out a pair of “picks and shovels” plays as investors look beyond Nvidia for the missing pieces of the puzzle that can help complete the AI infrastructure buildout.
Broadcom
Broadcom (NASDAQ:AVGO) is probably the second stock that should be on any investor’s “picks and shovels” list. It’s the custom silicon king and, in my view, it has more runway than the likes of Nvidia, especially given the direction the major hyperscalers are headed.
Sure, the hyperscalers won’t be able to outdesign Nvidia and stop their GPU orders in the medium term, but they are working on it. And Broadcom is the helping hand that I think investors might be underestimating. Simply put, I think Broadcom is a worthy complement to a name like Nvidia, as the giants in the industry to get on customized inference-focused chips.
While it feels like Nvidia is the one that’s slapping all the one-timers in the back of the net, it’s Broadcom, which is dishing out a ton of assists. And, in that regard, it’s also a company that’s not to be underestimated, even if the 63.4 times trailing price-to-earnings (P/E) multiple is a bit heftier.
While it seems a bit far-fetched today, I do think the $1.55 trillion titan could work its way into the top-three largest companies by market cap in the next five years. Whether that requires the giants above it to come in, or for Broadcom stock to continue its run, remains the big question.
ASML
In essence, ASML (NASDAQ:ASML) has the one pick (or shovel) that nobody else can seem to make. There simply is no substitute for the company’s EUV lithography machines. And if the fabs are going to ready up their capacity, the orders for ASML’s expensive machines are bound to rise. If we are in a boom, ASML may still be the place to be, especially as more firms look to enter the silicon race with the goal of pulling ahead of the competition.
As we move into the 2nm era and below, demand for the latest and greatest EUV machines could swell the backlog. For ASML, it’s a steady business that really can’t be taken elsewhere.
That’s the perk of being the lone player in a monopolistic market. With the firm recently pulling the curtain on a new machine that can boost production by 50% by 2030, perhaps the latest slip in the shares represents a decent chance to build a position while investors are no longer as enticed by real developments across the AI scene.
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