3 AI Infrastructure Stocks Powering the Data Center Boom in August

Joel South Fri, August 14, 2026 at 11:01 AM UTC

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NVIDIA's Data Center revenue surged 92% to $75 billion while Dell's AI-optimized server revenue exploded 757% year over year.

Hock Tan guided Broadcom's Q3 AI semiconductor revenue to $16 billion, representing over 200% year-over-year growth, with a target of $100 billion in AI sales by 2027.

The DOE projects data centers will consume 12% of U.S. electrical demand by 2028, the macro demand backdrop powering all three stocks.

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The AI factory buildout is accelerating into the back half of 2026, and August has brought fresh evidence that hyperscaler capex is picking up, from NVIDIA's $3 billion Lancium investment tying compute directly to power infrastructure to sovereign AI announcements out of Asia. The three names below sit at the physical layer of that buildout: silicon, custom accelerators, and the servers that stitch them together. Each has posted triple-digit or near-triple-digit year-over-year growth in its AI-exposed segment, and each has raised guidance heading into the fall.

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One macro anchor for the thesis: the U.S. Department of Energy projects data centers will account for up to 12% of U.S. electrical demand by 2028, and PJM's independent market monitor concluded that "data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices". That is the demand backdrop these three companies are selling into.

NVIDIA (NVDA): Still the Center of Gravity

NVIDIA (NASDAQ:NVDA) trades at $224.09, up 20.3% year to date and 10.1% over the past month. The Q1 FY2027 report set the tone: revenue of $81.615 billion, up 85.23% year over year, with non-GAAP EPS of $1.87 beating consensus by 5.42%.

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Data Center is now the entire story. That segment generated $75.246 billion, up 92% year over year, with networking growing 199% to $14.8 billion. Non-GAAP gross margin held at 75.0%, and Q2 guidance calls for revenue of $91.0 billion ±2%. CEO Jensen Huang framed it plainly: "The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed." Management also secured $119 billion in total supply-related commitments, a bet that this cycle runs.

Bull case: Networking is compounding faster than compute, which means every incremental AI cluster tightens NVIDIA's grip on the rack. Composite sentiment has firmed to 62.3, bullish with medium confidence, after a dip in early August. At a P/E of 45 against 85% revenue growth, the multiple is not stretched relative to growth.

Risk: China Data Center compute is zero in the guide, and management flagged a substantial increase in cash taxes in Q2. Any hyperscaler pause resets the multiple quickly.

Broadcom (AVGO): The Custom Silicon Alternative

Broadcom (NASDAQ:AVGO) closed at $416.05, up 20.65% year to date and 33.97% over the past year. Q2 FY2026 delivered revenue of $22.19 billion, up 47.9% year over year, with AI semiconductor revenue of $10.8 billion, up 143%.

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The forward number is the tell. CEO Hock Tan guided that "in Q3 we expect semiconductor revenue from AI to grow over 200 percent year-over-year to $16.0 billion." Total Q3 revenue is guided to approximately $29.4 billion, roughly 84% YoY growth, at a non-GAAP operating margin near 67%. Free cash flow ran $10.26 billion, or 46% of revenue, and AI semi revenue has stair-stepped from $5.2 billion in Q3 FY2025 to $8.4 billion, $10.8 billion, and a $16.0 billion guide.

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Bull case: Broadcom is the pure play on custom accelerators plus Ethernet AI switching, a combination hyperscalers increasingly want alongside merchant GPUs. Tan's stated ambition is exceeding $100 billion in AI sales by 2027, a target the Q3 guide already validates.

Risk: Retail sentiment has soured, with composite reading 34.59, bearish, and news-flow on hyperscaler capex sustainability, including questions about how OpenAI funds its $1.4 trillion in commitments, is weighing on the story. Customer concentration remains the structural risk.

Dell Technologies (DELL): The Chart of the Year

Dell Technologies (NYSE:DELL) trades at $484.50, up 288.46% year to date and 246.45% over the past year. That is not a typo. Shares rallied 9.87% on August 12 alone.

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The fundamentals justify the move. Q1 FY2027 revenue hit $43.84 billion, up 87.5% year over year, beating estimates by 22.58%. Non-GAAP EPS of $4.86 topped consensus of $2.96 by 63.99%, one of the largest bottom-line beats in mega-cap tech this cycle. AI-optimized server revenue reached $16.13 billion, up 757% year over year, with $24.4 billion in AI orders booked in the quarter. Management raised FY27 guidance to $165 billion to $169 billion in revenue, with AI-optimized server revenue now guided to approximately $60 billion, up 144% year over year.

Bull case: Dell is the platform hyperscalers, neoclouds, and sovereigns actually rack. With a $43 billion AI server backlog entering FY27 and a 20% dividend hike plus $10 billion added to buybacks, capital return is scaling with earnings. At a P/E of 27 against 87% revenue growth, the multiple still lags peers.

Risk: Gross margin compressed to 17.8% from 21.1% as AI server mix shifted, and Dell carries negative stockholders' equity of $1.4 billion alongside meaningful debt. If AI order velocity normalizes, mix-driven margin math cuts both ways.

What to Watch Next

Two data points reshape the thesis in the coming weeks: NVIDIA's Q2 FY2027 report (against the $91.0 billion guide) and Broadcom's ability to hit the $16.0 billion AI semi mark in Q3. If both land, the AI factory narrative has another quarter of runway. If either misses, the multiple compression will not be selective.

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Source: “AOL Money”