The Federal Reserve just pulled off its first rate hike since 2023, nudging its benchmark rate up to a 3.75% to 4% target range at the Sept. 15–16 meeting.
The next decision comes at the Oct. 27–28 gathering, and investors now have a few weeks to position for whatever tone Chair Kevin Warsh strikes on inflation and growth. If the Fed leans tougher again, durable growth stories tied to long-lived spending plans become more valuable.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Artificial intelligence fits that description, and three AI infrastructure names stand out as buys before that next decision.
Image source: Getty Images.
1. Qualcomm
Qualcomm Technologies (NASDAQ: QCOM) has spent most of its existence as a mobile chip company, but recent moves show a business trying to own more of the AI stack. In early September, Qualcomm announced a multi‑generational product collaboration with Amazon to build custom AI chips and optical connectivity for Amazon Web Services data centers.
According to Reuters, the deal allows Amazon to purchase up to $60 billion of Qualcomm AI data center products over time and includes warrants that vest as those purchases accumulate, which turns future chip shipments into a financial tie between the two companies.
Qualcomm is already a major player in the new generation of AI-powered PCs. Its Snapdragon X Series chips power many of the first Copilot+ PCs. That gives the company a foothold in both the device a person uses every day and the cloud infrastructure that runs the models behind the scenes.
I like how Qualcomm spreads its revenue opportunities across consumer devices and contracts instead of relying on one thing. As the Fed debates another hike, owning a chipmaker that just landed a long‑term hyperscaler partnership and sits inside a new PC category is one way to lean into AI spending that is less sensitive to a single quarter of economic data.
2. Marvell
Marvell Technology (NASDAQ: MRVL) has become one of the key suppliers of the “plumbing” inside AI data centers. Earlier this year, Marvell rolled out what it calls the industry’s first 102.4 terabit-per-second switch, purpose‑built for AI and cloud data center infrastructure, aimed at linking large clusters of accelerators with lower power and latency. In simple terms, Marvell made a super-fast computer traffic controller that helps thousands of AI chips communicate with each other faster while using less electricity.
At conferences this month, management was explicit that AI networking, optical connectivity, and custom XPU silicon are driving a higher revenue trajectory over the next few years. That matters with the Fed. When the Fed raises rates, projects that can be delayed usually get pushed out first. Re‑plumbing the data center to handle ever larger AI workloads is not easy to delay, so it should lock up some funding and work for Marvell.
For investors looking ahead to the October Fed meeting, Marvell offers exposure to AI infrastructure that is more about long‑term capacity planning than about discretionary consumer demand.
3. Supermicro
Super Micro Computer (NASDAQ: SMCI) sits one level higher than Marvell. It designs and sells complete server and storage systems optimized for AI, high‑performance computing and cloud workloads. The company is building powerful computer systems with AMD chips that can handle lots of AI work at once.
The company says it already has about $60 billion in AI orders, per Reuters, so its growth depends more on customers building huge AI data centers than on one small Fed rate change. There are still challenges like competition, cooling, and supply problems, but Supermicro is already selling the equipment needed to build these AI systems today. Sentiment here is similar to mine with Marvell: there is just too much money and workload waiting for this company for any Fed rate to hurt its stock.
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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Marvell Technology, and Qualcomm. The Motley Fool has a disclosure policy.
