Big tech continues to significantly invest in data centers that are essential for powering artificial intelligence (AI), with no signs of a slowdown in sight. Projections from Statista indicate that AI infrastructure spending will surge to $902 billion by 2029, a substantial increase from $334 billion in 2025.
Amid this spending wave, major players in the AI field are experiencing remarkable growth. Nvidia, one of the top suppliers of graphics processing units (GPUs), has seen its data center business account for over 90% of its recent revenue, which climbed 75% year over year. The company reported an impressive net income of $120 billion against $215 billion in revenue last year, underscoring its dominance in the market.
Nvidia’s investment in innovation has paid off, particularly with the demand for its latest Blackwell GPUs. In fact, even older Hopper-generation chips have sold out due to high demand. CEO Jensen Huang noted that the company sees a remarkable $1 trillion in cumulative purchase orders for Blackwell and the upcoming Rubin chips through 2027. As data center spending is expected to rise sharply in 2026, Nvidia is well-positioned to benefit directly from the increased demand for AI workload chips.
Additionally, Nvidia’s networking products, such as InfiniBand and NVLink systems, play a crucial role in the company maintaining its status as a key supplier for this burgeoning industry. Analysts believe Nvidia still represents a compelling buy-and-hold investment for long-term stakeholders, despite its significant stock run-up. The main caveat, however, is the cyclical nature of data center spending, which has historically experienced significant slowdowns, triggering drops of over 50% in stock value. Nevertheless, with Nvidia trading at approximately 16 times next year’s earnings and projected earnings growth of around 38% annually, there is potential for substantial gains over the next five years.
On the other hand, Iren is gaining recognition as a vital partner in the AI infrastructure development. As a data center builder, Iren faces the challenge of securing enough power to support next-generation chips, particularly when multiple GPUs operate simultaneously. The company is ahead of the curve, having secured more than 4.5 gigawatts of power, thus creating a significant advantage as it designs, builds, and operates its own data centers in-house.
Iren’s ambitious approach includes a $9.7 billion contract with Microsoft, with expectations to generate $3.4 billion in annualized revenue by the end of 2026. While the stock has already seen impressive gains, it still has plenty of room for growth. The annualized revenue target for 2026 accounts for only about 10% of the company’s secured power capacity.
Nonetheless, potential risks include financing challenges and the possibility of share dilution. However, the co-founders, Daniel and Will Roberts, are heavily invested in the company’s success and emphasize long-term shareholder value. With a market cap of $13 billion, Iren’s valuation reflects strong growth, but further upside is possible as it continues to secure high-profile partnerships.
As demand for data centers continues to rise in the AI sector, both Nvidia and Iren appear well-positioned for significant long-term growth, making them attractive investment options for those looking to capitalize on the ongoing AI boom.
