Semiconductor Sales Could Keep Climbing for Years to Come
Semiconductor companies have seen significant growth in recent years due to the massive AI data center build-out. Companies like Nvidia and Broadcom are at the forefront of this industry, with their leading AI accelerator chips.
PwC estimates that total capital expenditures for data centers will climb from $800 billion this year to $1.8 trillion by 2050. Amazon CEO Andy Jassy explained on the company's earnings call that spending will shift toward more semiconductors, suggesting there's a lot of room for revenue growth in semiconductor stocks.
Jassy noted that data centers depreciate much more slowly than server racks full of GPUs, meaning that once a data center is built, Amazon doesn't have to build it again. However, it does have to periodically refresh the chips inside of it.