AI related investment is now a key pillar of US economic growth, with companies pouring serious money into the hardware that powers these systems. That puts the suppliers of chip tools, contract manufacturers and designers in the spotlight for investors who do not want to miss where a lot of this capital is flowing. This article highlights three stocks from our semiconductor supply chain screen that align with that theme.
The three stocks covered below are only a taste of what this theme offers. The full semiconductor supply chain screen surfaces 12 more companies with equally compelling AI hardware stories that are not covered in this article. To see the broader opportunity set and shape your own view of the AI build out, head straight to the Semiconductor Supply Chain screener to identify, filter and analyze the setups that best fit your investment style.
Applied Materials (AMAT)
Applied Materials is one of the closest pure picks in this screen for the physical kit that lets foundries and chipmakers build AI focused logic and memory. This makes its mix of chip tools and follow on services a useful reference point for the whole theme.
Applied Materials supplies materials engineering equipment, software and support that chipmakers use to run key steps in semiconductor fabrication, with around US$22.4b from Semiconductor Systems and US$7.2b from Applied Global Services, and the business is valued at roughly US$314.2b by the market.
"The mix shift toward leading edge foundry logic, DRAM including high bandwidth memory, and advanced packaging is expected to account for most wafer fab equipment growth in 2026 and 2027, and Applied Materials is forecasting more than 70% growth in advanced packaging revenue and more than 50% growth in process diagnostics and control in 2026."
What really changes the story is how one unresolved shift in its product mix could flow through to both margins and long term demand.
That mix shift is the real swing factor, and the full narrative for Applied Materials explains how it could either accelerate returns or quietly limit Applied Materials' upside.
Lam Research (LRCX)
Lam Research is the pure equipment pick in this screen, because its etch and deposition tools are the workhorses foundries rely on to build AI accelerator and memory chips. Its single wafer processing segment generated about US$26.1b in revenue on a roughly US$300.9b market cap.
"NAND conversion pace. The June quarter's doubling is the first real evidence the upgrade cycle has started."
What really matters for Lam Research now is how one quiet shift in where memory makers spend could reshape both its pricing power and earnings resilience.
That shift in spend is the real hinge, and the full narrative for Lam Research explains how Lam Research's memory cycle, pricing power and AI exposure could be quietly decoupling from peers.
Penguin Solutions (PENG)
Penguin Solutions builds and runs AI focused data center infrastructure while its SMART Modular Technologies unit supplies high performance memory and storage like DRAM, CXL expansion and SSDs to AI hardware builders, with Integrated Memory at about US$924 million, Advanced Computing at roughly US$559 million, Optimized LED at around US$249 million, and a market cap near US$3.6 billion.
Penguin Solutions ties the Semiconductor Supply Chain theme together from the rack level up, wiring AI factories while also feeding them with the memory and storage that keeps accelerators busy and data moving.
"Increasing adoption of AI and high-performance computing across major enterprise verticals is driving robust demand for turnkey compute infrastructure, as evidenced by rising customer bookings and a diversified pipeline; this is likely to support sustained growth in revenue."
What happens to Penguin Solutions' margins if one pressure point in how those AI projects are priced, financed and renewed quietly shifts?
If that pricing tension matters to you, read the full narrative for Penguin Solutions to see whether Penguin Solutions' AI build out is quietly accelerating or masking risk.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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