The artificial intelligence (AI) market is experiencing rapid expansion. A Bain report predicts that the total addressable market for AI hardware and software will grow between 40% to 55% annually, reaching an estimated $780 billion to $990 billion by 2027. This phenomenal growth is particularly benefiting companies that supply AI tools, particularly those producing chips for data centers, as the demand for AI infrastructure skyrockets.
Top 2 AI Stocks Generating Significant Profits
Nvidia and Broadcom are emerging as leaders in the AI revolution, transforming into significant profit-generating entities in the tech sector. Both companies are accumulating cash at remarkable rates, enabling them to return a large portion of their profits to shareholders.
Nvidia: Leading AI Technology Innovation
Nvidia has been at the forefront of GPU-accelerated computing. This technology enhances the speed of compute-intensive tasks through specialized semiconductors and algorithms, essential for AI and robotics development. In its fiscal second quarter of 2026, Nvidia reported a revenue of $46.7 billion, marking a 6% increase from the previous quarter and a 56% rise compared to the same quarter the previous year. Of this, $41.1 billion was generated from data center sales.
- Cash from operations: Nearly $43 billion in the first half of the 2026 fiscal year, a significant rise from almost $30 billion year-over-year.
- Shareholder returns: $24.3 billion returned through dividends and share repurchases.
- Cash reserves: Approximately $57 billion remaining on its balance sheet at the end of the second quarter.
- Future projections: Nvidia’s Blackwell platform saw a 17% sequential growth in sales and is expected to continue its upward trajectory.
Broadcom: Capitalizing on AI Demand
Broadcom is another key player reaping the benefits of the AI surge. In its fiscal third quarter of 2025, the company reported record revenues of $16 billion, reflecting a 22% year-over-year growth. Notably, its AI-related revenue leaped 63% to $5.2 billion.
- Cash from operations: Generated nearly $7.2 billion during the same period.
- Free cash flow: Over $7 billion, representing 44% of its total revenue.
- Dividend growth: Returned $2.8 billion to shareholders via dividends; marking the 14th consecutive year of dividend increases since fiscal 2011.
- Future revenue projections: Expecting AI semiconductor revenue to reach $6.2 billion in the next fiscal quarter.
Investment Opportunities in AI Stocks
The surge in global investments aimed at AI semiconductors is turning both Nvidia and Broadcom into cash-flow machines. Their capacity to convert rising AI-driven revenue into cash allows them to return significant amounts to investors through dividends and stock buybacks. With robust cash generation likely to persist, these companies present attractive investment opportunities for those looking to engage in the AI megatrend.
