Nvidia and Micron Poised to Cash In on $420 Billion AI Spending Spree

Alphabet and Amazon are leading AI spending with projected expenditures of $220 billion and $200 billion, respectively. This increased demand for computing hardware will benefit companies like Nvidia (NVDA) and Micron (MU), which supply GPUs and memory chips.

Nvidia is already experiencing strong revenue growth, with an 85% increase in the first quarter. Analysts expect its revenue to grow by 43% next fiscal year. With a forward PE ratio of 24 times earnings, Nvidia appears undervalued at current prices.

Micron's memory chip business is also poised for growth due to increased demand and limited supply. The company expects the market to remain tight beyond 2027, providing ample opportunity for Micron to profit from its position as a leading supplier of memory chips. With a forward PE ratio of just 5.6 times earnings, Micron looks like a bargain compared to Nvidia.