Artificial intelligence is everywhere, and GPU stocks are a great way to invest in the transformative technology. GPUs, or graphics processing units, were introduced decades ago to handle the computationally intensive task of putting graphics on a computer screen. The math necessary to calculate the color of millions of pixels can quickly overwhelm a central processing unit. GPUs are designed to do these calculations in parallel, using hardware designed for the task.
The number crunching that must be done to train and use AI models can also be accelerated with GPUs. While gaming remains a key growth driver for the industry, AI may end up being more important in the long run.
What are GPU stocks?
GPU companies design semiconductor chips that feature a large number of cores capable of chewing through certain types of computational workloads. Personal computers, smartphones, gaming consoles, and anything that displays images on a screen ultimately have a GPU working behind the scenes.
In recent years, GPUs have found uses outside of graphics. In data centers, GPUs can be used to accelerate any task that can be effectively split up into chunks. This includes scientific simulations, data analytics, AI training, and AI inference.
Gaming is a huge industry that can drive growth for GPU companies in the long run, but artificial intelligence (AI) may be a bigger opportunity. Advanced large language models like ChatGPT from OpenAI require so much memory and computing power to train and run that clusters of ultra-powerful GPUs are necessary. Cloud computing providers are scooping up GPUs to offer AI services. Tech giant Microsoft (MSFT -1.97%) sees its annual AI cloud services revenue rapidly growing to $10 billion.
With demand for GPUs soaring, there are a few GPU stocks that could deliver market-beating returns for investors.
Five top GPU stocks for 2026
There are plenty of companies that design GPUs in one way or another. Here are five that can tap into the booming demand for AI chips:
| Name and ticker | Market cap | Current price |
|---|---|---|
| Nvidia (NASDAQ:NVDA) | $4.2 trillion | $168.05 |
| Advanced Micro Devices (NASDAQ:AMD) | $332.2 billion | $201.52 |
| Intel (NASDAQ:INTC) | $220.3 billion | $43.08 |
| Arm Holdings (NASDAQ:ARM) | $164.4 billion | $144.99 |
| Qualcomm (NASDAQ:QCOM) | $139.3 billion | $127.48 |
1. Nvidia
NASDAQ: NVDA
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NASDAQ: AMD
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NASDAQ: INTC
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Semiconductor
4. Arm Holdings
NASDAQ: ARM
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NASDAQ: QCOM
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Exchange-Traded Fund (ETF)
Should you invest in GPU companies?
The AI revolution is already driving demand for the most advanced GPUs into the stratosphere, and it appears that this demand is here to stay. One thing to be aware of, though, is that GPUs aren’t the only option for accelerating AI workloads. Specialized chips known as application-specific integrated circuits (ASICs) are built at the hardware level for a specific set of tasks, and they can provide significant performance and efficiency gains over more general GPUs.
Despite this threat, GPUs have become the standard way to train and run AI models, and that’s unlikely to change overnight. There are many ways to invest in AI, but for investors looking for a "pick-and-shovel" option, GPU stocks are a good bet.
Why invest in GPU stocks now?
- GPUs are the core hardware technology powering the artificial intelligence revolution.
- Given the strong demand outlook driven by the rise of AI, other data-center applications, and gaming, GPU technologies are a promising growth market to invest in.
- It's likely that the progression of artificial intelligence and machine learning technologies is still just getting started.
Factors to consider when investing in GPU stocks
Investors have to consider a variety of factors when investing in GPU stocks. For starters, it's important to differentiate between distinct areas of the GPU market. Graphics processing units used for gaming have much lower demand and profit margins compared to advanced GPUs used to power AI applications. Not all GPU products and sales are equal, and there are companies with exposure to the graphics-processing-unit market that have expertise other than designing the primary chips.
Investors also have to consider a GPU stock's valuation in relation to the growth outlook, financial footing, and competitive strengths of the underlying company. A company can have best-in-class offerings but still trade at a valuation that may leave limited room for upside. Alternatively, there will be times when an abundance of pessimism causes the market to underappreciate a GPU company's commercial strengths and growth potential.
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FAQ
GPU investments FAQ
About the Author
Keith Noonan has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Microsoft, Nvidia, and Qualcomm. The Motley Fool has a disclosure policy.
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