Three AI infrastructure-related stocks that investors should pay attention to as spending risk increases

Artificial intelligence is attracting huge amounts of capital, and the Bank for International Settlements warns that this wave of AI spending could prove painful if expectations outpace reality. With tech giants expected to spend more than $1 trillion on AI projects in 2025 and 2026, and corporate bonds being used to fund these buildouts, investors are right to ask which stocks are most susceptible to this theme. In this article, we highlight three stocks from our screen of AI hardware and infrastructure providers that we believe are well-positioned if the current AI investment cycle takes off.

Credo Technology Group Holding (CRDO)

overview: Credo Technology Group Holding provides high-speed connectivity hardware and IP, supplying active electrical cables, optical transceivers, memory solutions, and SerDes chiplets that move large amounts of data within AI data centers and high-performance computing systems.

operation: Credo generates approximately US$1.34 billion in revenue entirely from semiconductors and serves key end markets across major data center regions including the United States, Hong Kong, Taiwan, mainland China and the rest of the world.

Market capitalization: 44.38 billion USD

Investors looking at Credo Technology Group Holding are actually looking at its pure AI plumbing efforts. Ultra-fast connections between chips and racks are essential and cannot be easily postponed, even if sentiment around AI spending cools. The acquisition of DustPhotonics gives Credo a line of optical products alongside active copper electrical cables. This is important as data centers increasingly rely on silicon photonics for long-distance links. That said, there is already considerable optimism priced into the stock, including a high P/E multiple, heavy reliance on external borrowing, and meaningful insider selling that serves as a reminder that execution and capital discipline are important. The question is whether Credo’s growth, margins, and new lights are strong enough to justify continuing to attract investor attention as AI infrastructure spending evolves.

Credo’s AI plumbing story sounds compelling, but the key question is whether expectations match reality. Before you assume the current price reflects the full picture, check out 2 major perks and 2 important warning signs.

Silicon Motion Technology (SIMO)

overview: Silicon Motion Technology designs and sells controllers that sit inside solid-state drives and other flash storage products, helping PCs, smartphones, data centers, and industrial systems reliably manage and move data on NAND memory.

operation: Silicon Motion generates approximately US$1.06 billion in revenue from the development of NAND flash controllers for solid-state storage devices.

Market capitalization: 10.35 billion USD

Silicon Motion Technology is closely related to building AI. All AI servers and cloud data centers that process models also require fast, power-efficient storage, and the company supplies the controllers that make that storage work. Management highlights strong AI-driven demand for NAND with new PCIe Gen5 products targeting inference and AI workloads, as cloud providers seek to secure supply through 2026. At the same time, investors need to weigh the pressures of rich growth expectations, relatively high P/E ratios, reliance on external borrowing, and intense price competition across multiple end markets. The central question is whether Silicon Motion’s controller portfolio and partnerships with all major NAND manufacturers can offset these risks as AI storage needs evolve.

Silicon Motion’s AI storage story is accelerating, but the real question is how its growth expectations compare to what analysts are modeling. Fully understand analyst forecasts for Silicon Motion Technology

Seagate Technology Holdings (STX)

overview: Seagate Technology Holdings provides hard drives, solid state drives, and data storage systems that enable cloud providers, enterprises, and consumers to store and access large amounts of data, including AI workloads, video content, and games. The company also offers its Lyve edge-to-cloud platform, which supports customers who want to manage data across on-premises and cloud environments.

operation: Seagate generates approximately US$11.01 billion from manufacturing and selling storage solutions, with most of it coming from the United States (US$5.4 billion) and Singapore (US$4.53 billion), followed by the Netherlands (US$1.07 billion).

Market capitalization: 203.6 billion USD

Seagate Technology Holdings is at the heart of AI infrastructure, supplying high-capacity drives and the Mozaic HAMR platform for cloud and hyperscalers pouring capital into AI data centers. As BIS warns of the risk of an AI spending bust, Seagate’s demand is tied to a very specific need to store large amounts of unstructured data from AI tools and video. Management is focused on pricing discipline, driving nearline with high margins, and reducing debt. Earnings and revenue growth forecasts are solid, but the stock trades at a high P/E, is highly leveraged, and recent insider selling highlights that this is not a unilateral bet. A key consideration is how the overall picture of growth, valuation, and balance sheet fits with long-term AI storage demands.

Seagate’s AI storage story is accelerating, but its rich earnings and leverage raise real questions about how much is already built in. Get the full picture with 3 key benefits and 2 important warning signs

These three stocks are just a starting point. Our complete Artificial Intelligence (AI) Hardware and Infrastructure Provider Screen shows an additional 31 companies with similarly compelling narratives within the Artificial Intelligence (AI) Hardware and Infrastructure Provider Screen. Use Simply Wall St to identify, analyze, and filter the specific catalysts, balance sheet strength, and valuation factors that matter to your company so you can focus on the highest-conviction ideas in this AI build.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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