AI Infrastructure Use to Nearly Triple by 2029. Here Are 2 Stocks To Buy.
Big tech is still pouring billions into artificial intelligence (AI)-powered data centers — and the tide of spending doesn’t appear to be surging anytime soon. Statista projects AI infrastructure investment will rise to $902 billion by 2029, from $334 billion in 2025.
Even after a strong run, some of the biggest AI winners in the market, incl Nvidia (NASDAQ: NVDA) again Iren (NASDAQ: IREN)they are priced in a way that may leave room for meaningful change over the next five years. Here’s why both stocks remain compelling buys today.
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Data center spending is expected to increase significantly by 2026, according to Motley Fool research. This means more demand for chips that enable AI workloads, and that’s exactly what the leading supplier of graphics processing units (GPUs) is looking for. Nvidia’s innovation in GPUs, complete rack systems, and software has made it the foundation for building AI infrastructure.
Nvidia’s data center business accounted for more than 90% of revenue last quarter and grew 75% year over year. Its leadership in this market is reflected in its top margin, where it generated $120 billion in revenue from $215 billion in revenue last year.
Nvidia’s Blackwell GPUs have been in such high demand that even their six-year-old Hopper generation chips have sold out. CEO Jensen Huang said they see $1 billion in cumulative purchase orders for Blackwell and next-generation Rubin chips through 2027.
All that demand keeps Nvidia the default choice for new data centers. Take the data center builder’s IREN, which works Dell PowerEdge servers are powered by Nvidia Blackwell GPUs and NVL72 racks. Nvidia is also seeing growing demand for its connectivity products, including InfiniBand, Spectrum-X Ethernet, and NVLink systems, strengthening the company’s leadership as a key supplier of AI infrastructure.
For long-term AI investors, Nvidia still looks like one of the best stocks to buy and hold to benefit from the AI boom even after its monster performance. The biggest risk is that data center usage has historically come in waves, with declines such as 2018 and 2022. Each episode caused the stock to fall more than 50% from its high.
Still, Nvidia trades at about 16 times forward earnings next year, and analysts expect earnings to grow about 38% annually over the next few years — a setup that could still deliver positive results over the next five years.
To build new data centers, chips are only part of the equation. The growing bottleneck is getting enough power to run the data centers that are being built now. Next-generation chips will require multigigawatt campuses to support thousands of Nvidia’s Rubin GPUs running simultaneously — a huge opportunity for Iren.
Iren is ahead of the curve. It has more than 4.5 gigawatts of secured energy and a founder-led team focused on execution. It designs, builds, and operates its own data centers. The company was created to do everything in-house, including construction and design.
That approach helps Iren stay on schedule, which is important for tech giants that need computing capacity quickly. It has a $9.7 billion contract as well Microsoft and expects to generate $3.4 billion in annual operating revenue by the end of 2026.
The stock has risen over the past year, but there is still a big long-term upside. Its profit for the year 2026 represents about 10% of Iren’s protected capacity.
There are risks associated with how these projects will be financed and whether the issuance of additional shares may reduce returns. But that’s why the founder-led team is part of the thesis. Co-founders Daniel and Will Roberts are focused on creating long-term shareholder value, and each has a meaningful stake, aligning their interests with shareholders.
The stock’s value is already priced at strong growth, but the current market cap of $13 billion leaves room for more upside as Iren signs more hyperscaler deals. With only a small portion of the data center pipeline monetized today, Iren could provide attractive returns over the next five years or more.
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John Ballard has positions in Irene and Nvidia. The Motley Fool has positions and recommends Microsoft and Nvidia. The Motley Fool has a policy of disclosure.
AI Infrastructure Use to Nearly Triple by 2029. Here Are 2 Stocks To Buy. was first published by The Motley Fool
