US President Donald Trump has announced a $500 billion artificial intelligence initiative dubbed Stargate in collaboration with Oracle, SoftBank, and OpenAI.
While the joint venture will enable Nvidia to retain its leadership position in the AI market, a number of other chip stocks could benefit as the aforementioned project comes through as well.
These include Broadcom, Micron, and Arm Holdings, according to Mizuho analyst Vijay Rakesh.
Broadcom Inc (NASDAQ: AVGO)
Mizuho analyst expects Broadcom to emerge as a major beneficiary of Stargate.
Trump’s artificial intelligence project, he’s convinced, could lift the demand for AVGO products and help expand its serviceable addressable market in AI.
Broadcom is focused on building its own chip that makes it fairly positioned to benefit from the joint venture as “$40-50B incremental of the $500B spend by 2027-28E from OpenAI could be on custom silicon as we move later into the project timeline” Rakesh argued in a recent report.
Additionally, Broadcom could benefit as Meta Platforms delivers on its promise of spending more on artificial intelligence in 2025. Note that AVGO shares have well over doubled since the start of 2024.
Micron Technology Inc (NASDAQ: MU)
Vijay Rakesh sees Micron benefitting from the aforementioned AI joint venture as it could meaningfully increase the demand for connectivity and storage over the next few years.
Stargate’s focus on building massive data centres as part of its broader commitment to advancing AI technologies could unlock substantial demand for high-performance memory components.
That’s where Micron Technology that’s up nearly 20% year-to-date steps in.
It will likely play a key role as a supplier of the required hardware that powers the said artificial intelligence initiative. Additionally, investors should own MU shares in 2025 for a 0.45% dividend yield as well, according to the Mizuho analyst.
Arm Holdings Plc (NASDAQ: ARM)
Arm has inched down in recent sessions but Mizuho dubs the weakness an opportunity to load up on its shares as the chip design company sits right at the heart of Trump’s Stargate.
The AI initiative will likely give a major boost to demand for graphic processing units (GPUs) and networking designs – areas in which Arm excels.
In fact, the president’s project Stargate could mean up to $200 million a year of incremental royalty revenue from those two areas for Arm, according to Rakesh.
Arm stock is attractive to own also because it swung to a profit in its latest reported quarter. At the time, the company’s management guidance of up to $4.1 billion in revenue, with adjusted earnings per share expected to range between $1.45 and $1.65 for the full year.
However, Arm shares aren’t particularly inexpensive to own after having more than tripled since its IPO at $54 per share.
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