The artificial intelligence (AI) trade, which lifted Nvidia (NASDAQ: NVDA) from a US$400 billion stock in 2022 to a massive US$4.7 trillion market capitalization, has minted new millionaires. Nvidia and Microsoft (NASDAQ: MSFT), the early big investor in ChatGPT developer OpenAI, were early winners as the AI mega trend gripped the stock markets. However, the great times belong to the past. The risk-reward propositions for these titans has since shifted.
Nvidia is now navigating a US$4.7 trillion market cap where even market-beating earnings reports sometimes result in a stagnant stock price. Meanwhile, Microsoft stock is in a tailspin after losing a trillion dollars in market cap during the past four months. Microsoft’s colossal size means that even stellar AI growth in Azure is battling against the gravity of the law of large numbers. Perhaps there isn’t much for new investors to gain on the respective AI stocks. Nvidia and Microsoft’s future revenue and earnings growth are already fully priced in.
Interestingly, looking beyond Nvidia and Microsoft, a massive second wave of capital is rotating toward the infrastructure bottleneck-breakers and the custom silicon kings in the AI infrastructure trade. Advanced Micro Devices (NASDAQ: AMD) stock and Celestica (TSX: CLS) stock are perfectly positioned to capture the overflow from the big tech spending spree.
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Advanced Micro Devices stock
At a US$344 billion market cap, Advanced Micro Devices is a small yet highly potent challenger to Nvidia’s AI market dominance. Even if AMD may always play “second best” to Nvidia, the smaller semiconductor designer is gaining significant market share in 2026 as new multi-billion deals with Oracle, OpenAI and, most recently, Meta Platforms transition into revenue from sales of its latest Instinct MI450 chips, starting during the second half of this year.
Whatever billions in revenue AMD makes from AI chips is Nvidia’s market share to lose, and Nvidia’s “losses” to AMD may keep growing over the next two years.
AMD stock rallied by more than 8% on Tuesday after announcing an expanded six gigawatts AMD GPUs deal. It has taken some time, but AMD has finally assembled a competitive arsenal to emphatically challenge Nvidia’s monopoly in the AI accelerator market.
As hyperscalers look to break the “overpriced” Nvidia GPU monopoly to save on capital expenditures, AMD is the more affordable alternative player with the scale to catch the fallout. Bay Street sees AMD accelerating the revenue growth rate from 34.4% in 2026 to 39.4% in 2027, reaching a US$65 billion revenue run-rate next year, up from just US$25.8 billion in 2024.
With a significantly smaller market cap than Nvidia, AMD has a much clearer path to multi-bagger returns from these levels.
AMD stock trades at a forward P/E of 20, and a forward price-earnings-to-growth (PEG) ratio of 0.7, which implies shares are undervalued given the AI stock’s earnings growth potential.
Celestica stock: The Canadian AI infrastructure king
If you want to play the AI buildout without the “chip war” volatility, look to the equipment backbone. Celestica has transformed from a simple electronics contract manufacturer into a high-value engineering powerhouse.
Celestica is the primary builder of the hot selling 800G and 1.6T Ethernet switches that allow AI clusters to actually talk to each other. Celestica’s networking hardware and cooling systems are making the multi-billion AI data centre builds possible across the globe.
With a 2026 revenue target of $17 billion and a dominant position in the tech supply chain, Celestica is the “toll booth” of the AI data centre.
Celestica stock has gained 159% in value during the past year. Shares trade at a forward P/E of 31.8, and a PEG ratio of 1.0 implies CLS stock is fairly priced despite the recent run. More gains could lie ahead as AI spending reaches new record highs in 2026.
