Artificial intelligence is drawing huge sums of capital, and the Bank for International Settlements is warning that this wave of AI spending could turn painful if expectations run ahead of reality. With tech giants projected to commit over $1t to AI projects in 2025 and 2026, and corporate debt used to fund these build outs, investors are right to ask which stocks might be most exposed to this theme. This article looks at 3 stocks from our AI Hardware & Infrastructure Providers screener that appear well positioned if the current AI investment cycle stays on track.

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 volumes of data inside AI data centers and high performance computing systems.

Operations: Credo generates about US$1.34b of revenue entirely from semiconductors, with key end markets across major data center regions including the United States, Hong Kong, Taiwan, Mainland China and the rest of the world.

Market Cap: US$44.38b

Investors looking at Credo Technology Group Holding are really looking at a pure play on the plumbing of AI. Ultra fast connections between chips and racks are essential and cannot easily be deferred even if sentiment around AI spending cools. The DustPhotonics acquisition gives Credo an optical lineup that sits alongside its copper active electrical cables, which is important as data centers gradually lean more on silicon photonics for longer reach links. That said, the stock already prices in a lot of optimism, with a high P/E multiple, heavy reliance on external borrowing and meaningful insider selling reminding you that execution and capital discipline matter. The question is whether Credo’s growth, margins and new optical ramp are strong enough to justify staying on investors’ radar as AI infrastructure spending evolves.

Credo’s AI plumbing story appears compelling, but the key question is whether expectations match reality. Before assuming the current price reflects the full picture, review the 2 key rewards 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 manage and move data reliably on NAND memory.

Operations: Silicon Motion generates about US$1.06b in revenue from developing NAND flash controllers for solid state storage devices.

Market Cap: US$10.35b

Silicon Motion Technology is tightly linked to the AI build out, because every AI server and cloud data center that processes models also needs fast, power efficient storage, and the company supplies the controllers that make that storage work. Management highlights strong AI driven demand for NAND, with cloud providers trying to secure supply through 2026 and newer PCIe Gen5 products aimed at inference and AI workloads. At the same time, investors need to weigh rich growth expectations, a relatively high P/E, reliance on external borrowing and pressure from intense price competition across several end markets. The central question is whether Silicon Motion’s controller portfolio and partnerships with all major NAND makers can offset these risks as AI storage needs evolve.

Silicon Motion’s AI storage story is accelerating, but the real question is how growth expectations compare with what analysts are modeling. Get the full context with the 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 help cloud providers, enterprises and consumers store and access large volumes of data, including AI workloads, video content and gaming. The company also offers its Lyve edge to cloud platform, which supports customers that want to manage data across on premise and cloud environments.

Operations: Seagate generates about US$11.01b from manufacturing and distributing storage solutions, with most revenue coming from the United States (US$5.40b) and Singapore (US$4.53b), followed by the Netherlands (US$1.07b).

Market Cap: US$203.60b

Seagate Technology Holdings sits at the heart of AI infrastructure, supplying mass capacity drives and its Mozaic HAMR platform for the cloud and hyperscalers that are pouring capital into AI data centers. As the BIS flags risks of an AI spending bust, Seagate’s demand is tied to a very tangible need: storing the flood of unstructured data from AI tools and video. Management is focusing on pricing discipline, high margin nearline drives and debt reduction. Earnings and revenue growth forecasts are strong, yet the stock trades on a rich P/E and carries meaningful leverage, with recent insider selling highlighting that this is not a one way bet. The key consideration is how that growth, valuation and balance sheet picture fits together for long term AI storage demand.

Seagate’s AI storage story is accelerating, yet its rich P/E and leverage raise real questions about how much is already baked in. Get the full picture with the 3 key rewards and 2 important warning signs

The three stocks here are just a starting point. Our full Artificial Intelligence (AI) Hardware & Infrastructure Providers screener surfaces 31 more companies with equally compelling narratives inside the Artificial Intelligence (AI) Hardware & Infrastructure Providers screener. Use Simply Wall St to identify, analyze and filter for the specific catalysts, balance sheet strength and valuation drivers that matter to you so you can focus on the highest conviction ideas in this AI build out.

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