A recent survey from JPMorgan reveals a clear trajectory towards increased investment in AI infrastructure, with expectations of significant revenue growth in the semiconductor sector over the next several years.

Here's how the 166 CIOs responded:

  • AI Infrastructure Investment Soars: Over 75% of surveyed CIOs plan to allocate more than 5% of their IT budgets to AI compute hardware within three years, up from approximately 25% currently. This signals a projected 45% compound annual growth rate (CAGR) in AI-related spending, outpacing previous forecasts.
  • Cloud Capex Expansion: Cloud spending is set to rise to 35% of IT budgets in five years, up from 20% presently, indicating a robust 12-16% CAGR. This growth supports sustained infrastructure investments by cloud service providers, bolstering demand for semiconductor solutions.
  • Beneficiaries of AI Boom: Leading semiconductor firms including Nvidia Corp (NVDA  ), Advanced Micro Devices Inc (AMD  ), Broadcom Inc (AVGO  ), Marvell Technologies Inc (MRVL  ) and Arm Holdings (ARM  ) are poised to capitalize on this surge in AI spending. These companies are expected to see continued revenue growth as AI adoption expands beyond foundational model training to broader commercial applications.
  • NVDA and Peers Set to Gain: Nvidia, a frontrunner in AI compute, stands to benefit significantly from enterprise AI spending, supported by robust demand from cloud service providers. AMD, Broadcom, Marvell and Arm also stand out as key beneficiaries, reinforcing their positions in the AI semiconductor market.
  • Networking Products Demand Surge: Broadcom, Marvell and Astera Labs Inc (ALAB  ) are expected to see increased demand for high-performance networking products. This includes advanced chipsets such as Astera's Gen5/Gen6 retimer chipsets and Marvell's 800G/1.6T PAM4 DSP optical chipsets, essential for AI and accelerated compute deployments.
  • Cloud Service Provider Growth: The healthy growth outlook for cloud workloads bodes well for Intel Corp (INTC  ), AMD, Arm, Micron Technology Inc (MU  ) and Western Digital Corp (WDC  ), supporting strong CPU shipments and robust demand for memory and storage solutions.
The JPMorgan survey paints a bullish picture for semiconductor stocks tied to AI and accelerated compute technologies.

With strong indications of sustained spending and infrastructure build-outs by enterprise customers and cloud service providers, the semiconductor sector, particularly leaders in AI compute, looks poised for significant growth ahead.