The artificial intelligence (AI) space remains rock solid, supported by an extremely bullish demand scenario. As a result, AI trade regained momentum after facing a short-term hurdle. Four major hyperscalers have decided to invest a massive $650 billion in 2026 as capital expenditure for AI-infrastructure development. This marks a significant 71.1% year-over-year increase in capital spending on the AI ecosystem.

The PHLX Semiconductor Index (SOX) and the iShares Semiconductor ETF (SOXX) ended in positive territory for the 18th consecutive trading session. Buoyed by AI trade, the tech-heavy Nasdaq Composite Index and the broad-market S&P 500 Index are currently trading at all-time highs. 

Consequently, AI semiconductor manufacturers stand to gain significantly from enormous spending by AI hyperscalers. Here, we recommend three giant AI chipset makers with a top Zacks Rank for investment to enjoy massive short-term price upside potential. 

These are: Micron Technology Inc. (MU Quick QuoteMU - Free Report) , NVIDIA Corp. (NVDA Quick QuoteNVDA - Free Report) and Broadcom Inc. (AVGO Quick QuoteAVGO - Free Report) . Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The chart below shows the price performance of our three picks in the past three months.

Image Source: Zacks Investment Research

Micron Technology Inc.

Micron Technology is benefiting from the rapidly expanding AI-driven memory and storage markets. The positive impacts of inventory improvement across multiple end markets are driving top-line growth. 

MU has become a leader in the AI infrastructure boom due to strong demand for its high-bandwidth memory (HBM) solutions. Record sales in the data center end market and accelerating HBM adoption have been driving MU’s Dynamic Access Random Memory (DRAM) revenues higher.

The growing adoption of AI servers is reshaping the DRAM market as these systems require significantly more memory than traditional servers. This is boosting demand for both high-capacity DIMMs (Dual In-line Memory Module) and low-power server DRAM. 

MU is capitalizing on this trend with its leadership in DRAM technology and a strong product roadmap that includes HBM4, slated for volume production in 2026. MU’s investments in next-generation DRAM and 3D NAND ensure that it remains competitive in delivering the performance needed for modern computing.

Strong Price Upside

Micron Technology has an expected revenue and earnings growth rate of more than 100% each, respectively, for the current year (ending August 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.001% over the last 30 days. 

The short-term average price target of brokerage firms represents an increase of 9.9% from the last closing price of $496.72. The brokerage target price is currently in the range of $249-$852. This indicates a maximum upside of 71.5% and a maximum downside of 49.9%. The current risk-reward ratio is 1:1.4.

NVIDIA Corp.

NVIDIA — the undisputed global leader of generative AI-powered graphical processing units (GPUs) — has been benefiting from higher shipments of the Blackwell GPU computing platforms. 

In January, NVDA unveiled its new AI superchip — Vera Rubin — during the annual CES technology conference in Las Vegas. This innovative rack-scale system will deliver 10 times more performance per watt than its predecessor, Grace Blackwell. 

NVIDIA will start the shipment of Vera Rubin in the second half of 2026.  It has decided to announce its roadmap for Rubin Ultra, likely to be introduced in late 2027, and Feynman AI chips to be launched in 2028. 

NVDA is supported by an extremely bullish demand scenario. The company expects between $3 trillion and $4 trillion in AI infrastructure spending by the end of the decade. NVDA has been benefiting from enormous spending by AI hyperscalers.

Excellent Price Upside

NVIDIA has an expected revenue and earnings growth rate of 65.4% and 69%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.4% over the last 30 days.

The short-term average price target of brokerage firms represents an increase of 29.1% from the last closing price of $208.27. The brokerage target price is currently in the range of $140-$380. This indicates a maximum upside of 82.5% and a maximum downside of 32.8%. The current risk-reward ratio is 1:2.5.

Broadcom Inc.

Broadcom is experiencing strong momentum fueled by growth in AI semiconductors and continued success with its VMware integration. Strong demand for its networking products and custom AI accelerators (XPUs) has been noteworthy. 

While the latest expansion of deals with Google and Anthropic has given AVGO a lift, the company is thriving primarily due to its AI semiconductor solutions, including custom AI accelerators and AI networking.

AVGO’s AI segment benefits from custom accelerators and advanced networking technology that support large-scale AI deployments with improved performance and efficiency. AVGO expects second-quarter fiscal 2026 AI revenues to surge 140% YoY to $10.7 billion. 

AVGO’s networking portfolio is gaining from the strong demand for Tomahawk 6 products. The acquisition of VMware has benefited infrastructure software solutions. A rich partner base is a key catalyst.

Solid Price Upside

Broadcom has an expected revenue and earnings growth rate of 60.4% and 67.9%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.8% over the last 30 days.

The short-term average price target of brokerage firms represents an increase of 11.2% from the last closing price of $422.76. The brokerage target price is currently in the range of $360-$630. This indicates a maximum upside of 49% and a downside of 14.8%. The current risk-reward ratio is 1:3.3.