The U.S. technology sector, especially, the artificial intelligence (AI) space, is back to normalcy after the DeepSeek-led rout in January. DeepSeek claimed that its open-source large language model R1 can almost mirror the capabilities of its major U.S. counterparts, like OpenAI’s GPT-4, Meta’s Llama and Google’s Gemini, but at a fraction of the cost.

After the initial knee-jerk expression and panic selling by market participants, several technology experts believed that Chinese supremacy over the U.S. AI ecosystem is yet to be established. Meanwhile, as the fourth-quarter 2024 earnings season progresses, what we have seen is the reaffirmation by several big techs to spend hundreds of billions of dollars in AI-infrastructure in the coming years.

DeepSeek raised questions particularly on AI-infrastructure developers like chipset manufacturers, data center equipment and solutions providers and nuclear energy producers. However, huge spending by big techs, along with full political support from the Trump administration, is ushering in a bright upside for AI infrastructure developers over the long term.   

At this stage, we recommend five U.S.-based AI-infrastructure stocks with a favorable Zacks Rank to buy and hold for long term. These are NVIDIA Corp. NVDA, Broadcom Inc. AVGO, Constellation Energy Corp. CEG, Marvell Technology Inc. MRVL and Innodata Inc. INOD.

AI Frenzy Remains Intact

Four of the “magnificent 7” stocks have decided to invest a massive $325 billion in 2025 as capital expenditure for Ai-infrastructure development. This marks a significant 46% year over year increase in capital spending for AI space.

CEOs of Meta Platforms Inc. (META), Microsoft Corp. (MSFT), Alphabet Inc. (GOOGL) and Amazon.com Inc. (AMZN) have said in their latest earnings conference call that these huge investments are needed to remain competitive as demand for AI space is increasing exponentially. Bloomberg Intelligence estimates that generative AI spending will increase from $67 billion in 2023 to $1.3 trillion by 2032.

Moreover, AI-powered data centers are the booming industry now. The data center’s growth is so enormous that giant operators like Microsoft, Alphabet, Meta Platforms and Amazon already collaborated with nuclear energy producers to mitigate the need of massive electricity for data centers. 

A research report by Rystad Energy predicted that the combined expansion of traditional and AI-driven data centers, along with chip foundries, will increase the cumulative demand for U.S. electric power by 177 TWh from 2023 to 2030, reaching a total of 307 TWh. 

5 U.S. AI-Infrastructure Developers to Buy

These five U.S.-based AI infrastructure developers have strong potential to tap robust spending by big techs. These companies are expected to benefit over the long term and consequently, their stock prices should take northward trajectory. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks in the past month.

Image Source: Zacks Investment Research

NVIDIA Corp.

Zacks Rank #2 NVIDIA — the undisputed global leader of the generative AI chipset developer space — has been offering uninterrupted product innovation. NVDA is expected to benefit in two ways. Demand for its Hopper chips remains strong amid an industry-wide shift from central processors to NVDA-made accelerators.

NVIDIA’s next-generation AI chip, Blackwell Ultra, would be the next driver. These chips are expected to be available in data centers in the fourth quarter of fiscal 2025. Within the series, the B200 is 30 times speedier than its predecessor.

At the Consumer Electronics Show 2025, NVDA introduced GeForce RTX 50 Series GPUs, which are powered by its flagship Blackwell architecture. These GPUs provide significant improvements in AI-driven rendering, enhancing gaming and creative workflows.

NVDA targets a $1 trillion market opportunity for its GPU’s from the growing AI-powered data centers. NVDA’s major customers have started receiving the Blackwell AI chips. In fourth-quarter fiscal 2025, NVDA expects to deliver more Blackwell chips than previously estimated. 

NVIDIA has an expected revenue and earnings growth rate of 48.7% and 43.2%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 30 days. It has a long-term (3-5 years) earnings growth rate of 20% compared with 12.4% of the S&P 500. 

NVIDIA currently carries a forward P/E of 30.86X for the current financial year, compared with 32.26X of the industry and 18.52X of the S&P 500. NVDA has a return on equity of 114.83% compared with 6.45% of the industry and 16.82% of the S&P 500 Index.

Broadcom Inc.

Zacks Rank #2 Broadcom benefited from strong demand for Broadcom’s custom AI accelerators and networking. Broadcom experienced four times growth in AI connectivity revenues, driven by global shipments of its Tomahawk and Jericho solutions. AVGO supplies a wide variety of chips and accessories that are critical components in data center infrastructure.

The acquisition of VMware has benefited the infrastructure software solutions of Broadcom. VMware’s expanding clientele, which includes the likes of Alphabet and Meta Platforms, is noteworthy. AVGO’s strong partner base, including Arista Networks, Dell Technologies, Juniper and Supermicro, has been a key catalyst. 

Broadcom has an expected revenue and earnings growth rate of 18.3% and 29.6%, respectively, for the current year (ending October 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days. 

It has a long-term (3-5 years) earnings growth rate of 17.8% compared with 12.4% of the S&P 500. Broadcom has a return on equity of 28% compared with 0.69% of the industry and 16.82% of the S&P 500. It has a current dividend yield of 1.05%. 

Constellation Energy Corp.

Zacks Rank #2 Constellation Energy is a leading energy company in the United States with a significant thrust on clean energy, especially nuclear energy. CEG’s strategic $5.1 billion capital expenditure through 2025 should help acquire nuclear fuel and increase inventory levels. CEG aims to eliminate 100% of greenhouse gas emissions leveraging on innovative technology.

In late 2024, Microsoft entered into a 20-year agreement with CEG to revive the Three Mile Island nuclear plant in Pennsylvania. The $1.6 billion investment aims to restart the reactor, which has been dormant since 2019, to provide carbon-free electricity for Microsoft’s expanding data centers. 

Constellation Energy has an expected revenue and earnings growth rate of -7.9% and 10.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 30 days. It has a long-term (3-5 years) earnings growth rate of 15.8% compared with 12.4% of the S&P 500. Constellation Energy has a current dividend yield of 0.46%. 

Marvell Technology Inc.

Zacks Rank #2 Marvell Technology is benefiting from the strong demand environment across the data center end market. In the last reported quarter, MRVL’s data center end market revenues increased 98% year over year and 25% sequentially, propelled by strong revenue growth across AI-driven demand for PAM products and ZR electro-optics. 

MRVL is a promising player in the solid-state drive controllers’ market. The storage market is seeing a steady increase in demand, given the fast-growing data volume, especially the exponential growth in unstructured data. Completion of inventory digestions is likely to aid growth for MRVL across the enterprise networking and carrier infrastructure end markets.

Marvell Technology has an expected revenue and earnings growth rate of 40.6% and 73.7%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate current-year earnings has improved 0.7% in the last seven days. It has a long-term (3-5 years) earnings growth rate of 33.7% compared with 12.4% of the S&P 500.

Innodata Inc.

Zacks Rank #1 Innodata operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. INOD operates through three segments: Digital Data Solutions (“DDS”), Synodex, and Agility.

The DDS segment of INOD is engaged in the provision of AI data preparation services, collecting or creating training data, annotating training data, and training AI algorithms for its customers, as well as AI model deployment and integration services. 

DDS also provides a range of data engineering support services, including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management.

INOD is focused on supporting big tech companies in developing generative AI models. This strategy paid off in third-quarter 2024 as the company generated revenues of $30.6 million from a single big tech customer.

Innodata has an expected revenue and earnings growth rate of 34.6% and 5.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 15.5% over the last 60 days. INOD has a return on equity of 44.38% compared with 11.78% of the industry and 16.82% of the S&P 500.

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