Artificial intelligence has minted one of the biggest profit stories in modern market history, and one company, Nvidia (NASDAQ:NVDA), has raked in most of the cash. Its formula isn’t very complicated, as Nvidia’s graphics chips power everything from OpenAI’s ChatGPT to Tesla’s full self-driving algorithms.
Yet change is stirring as Wall Street begins to question whether Nvidia’s best days are already priced into the mix. In fact, there’s a strong case to be made that investors are quietly rotating toward the next wave of AI beneficiaries, especially companies that are turning AI into recurring revenue rather than capital-intensive hardware sales.
How to Trade November's Post-Cut Volatility
Markets are moving fast after the Fed's latest rate cut. Stocks are swinging sharply, metals are testing resistance, and short-term setups are forming at the fastest pace in months. Join Matt Maley live on Wednesday, November 5 at 6 PM ET to see how he's positioning now, the signals he's watching, and the strategy he's using to capture the next major move in this volatile market. Join the Free Session
“The ‘AI trade’ has moved from narrative to fundamentals,” said Dylan Dewdney, co-founder at Kuvi AI, a Toronto-based fintech firm. “Nvidia’s margins and scale are priced for perfection, yet global demand for compute remains exponential. The smarter play is in companies building agentic frameworks, which help you utilize agents for optimized, niche functions, like portfolio management.”
“The next AI winners won’t be chipmakers, they’ll be integration architects. Nvidia’s CUDA moat, Microsoft’s OpenAI lock-in, and Google’s Gemini stack are all versions of the same truth,” Dewdney noted. “Whoever controls the orchestration layer between compute, models, and users, wins.”
Dewdney said the first AI wave was compute and the second wave will be coordination. “As gross margins plateau, investors will rotate toward AI infrastructure that compounds productivity, capital allocators, not capital burners.”
These Companies Stand Out As Future AI Winners
Who best fits the shifting AI landscape? Wall Street experts give these stocks a nod.
AMD (NASDAQ:AMD)
Even as an AI underdog, AMD is quietly positioning itself for the “AI efficiency” phase.
“The MI300’s 2x performance-per-watt edge matters as inference workloads become the bottleneck, not training. 2026 could be AMD’s inflection point if they keep winning cloud share,” Dewdney said. “It’s the classic efficiency versus dominance dynamic.”
At Boston-based VistaShares, CEO Adam Patti said he’s “very bullish” on AMD’s outlook, as it’s the fourth-largest holding in the firm’s AI Infrastructure ETF (NYSE:AIS).
“They have a talented management team, significant industry support, and innovative new products on the horizon that will make them a significant player across the spectrum of AI development, but particularly within the inference segment of the market, which is expanding exponentially,” he noted.
Microsoft (NASDAQ:MSFT)
Microsoft’s AI integrations across Azure, Copilot, and Office 365 are now monetizing faster than expected, contributing an estimated $10 billion in incremental revenue in FY2025. Meanwhile, investors are re-rating AI providers that can turn inference into recurring profits.
“MSFT is a powerful company with a massive installed base of customers,” Patti said. “However, I wouldn’t view them as a ‘picks and shovels’ play. As a hyperscaler, MSFT is focused now on making the massive infrastructure investments required to build far larger compute capabilities so that one day they can create applications powerful enough to provide significant value to their consumers and generate meaningful profits from these new tools.”
Patti said he views MSFT’s recent integrations as “baby steps” towards a far larger AI-centered future, but they have “certainly had success in these early days.”
Taiwan Semiconductor (NYSE:TSM)
Patti is also a fan of Taiwan Semiconductor Manufacturing Company.
“TSM manufactures chips for NVDA, AMD, AAPL, among others,” he said. “Without their capabilities and technology, the AI buildout would be difficult to execute. Fortunately, they have moved some manufacturing to the United States, which alleviates a bit of the geopolitical risk embedded in their business model.”
The Next Phase
The stock market’s next AI winners may not be the fastest chip sector giant, but the most efficient, and of the three picks listed above, Microsoft and AMD may be the best positioned.
“MSFT is one of the largest investors in AI Infrastructure, so certainly they will be one of the largest beneficiaries of the eventual success of AI-driven software and services,” Patti said. “However, we have a way to go to realize that business model as highly profitable.”
For now, Microsoft is more of a CAPEX provider with the promise of profits down the road. “AMD, however, is a potential winner in the next phase of AI development,” he added. “As inference takes center stage, AMD should be one of the primary beneficiaries.”
Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.
Image: Shutterstock
