Five mega-cap stocks tied to AI infrastructure show 23%-42% upside, backed by hyperscaler CapEx forecasts and strong earnings beats.
Taiwan Semiconductor Manufacturing (TSM) reported Q2 revenue of $40.20 billion, up 36% year-over-year, beating estimates with EPS of $4.31 versus $3.89 expected. NVIDIA secured $119 billion in supply commitments and guided Q2 revenue to $91 billion, reinforcing its dominance in AI infrastructure.
Meta surpassed Q1 EPS estimates by 57% on 33% revenue growth, trading at a forward P/E of 19, the lowest in the group. Analysts rate all five stocks as buys, with base-case upside ranging from 23% to 42%. Hyperscalers like Alphabet, Amazon, and Meta are projecting 2026 CapEx of $175-$200 billion, driving demand for AI-related hardware.
The stocks, held by Tiger Global, are positioned at the center of the AI supercycle, with TSMC acting as a critical supplier for NVIDIA, Amazon, and Meta. Advanced nodes now account for 77% of TSMC’s wafer revenue, with 2nm production already underway.