The artificial intelligence (AI) build-out isn’t a single trade. The money flows through layers: Cloud platforms rent out computing capacity, a foundry manufactures the chips underneath it, and data center builders put up the buildings that house all of it.
That means an investor with $5,000 to put to work doesn’t have to bet on one layer. I’d split the money across three stocks — Amazon (NASDAQ:AMZN), Taiwan Semiconductor Manufacturing (NYSE:TSM), and a small slice of Applied Digital (NASDAQ:APLD). Each contributes something the other two can’t.
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And the sizing matters as much as the names.
Image source: The Motley Fool.
Amazon: the anchor
Amazon gets the biggest slice because it pairs a fast-growing AI business with the profits to pay for it.
Amazon’s cloud computing segment, Amazon Web Services (AWS), hasn’t grown this fast in 18 quarters. Second-quarter revenue rose 37% year over year, reaching $42.2 billion, and the segment turned that growth into $16.6 billion of operating income, up about 64%. In other words, the cloud layer of the build-out is accelerating — and profitably.
Even so, AWS is only about a fifth of Amazon’s revenue. The rest comes mostly from retail and advertising, which gives the stock a footing the pure AI plays lack.
The spending is heavy, to be sure. Free cash flow ran about $7.6 billion negative over the trailing 12 months, mostly because of the company’s AI infrastructure investments. But that kind of spending is exactly what the other two stocks in this basket get paid from.
Shares trade at about 24 times forecast earnings for next year, the basket’s most ordinary valuation on its most diversified business. That seems a reasonable price for an anchor.
Taiwan Semiconductor: everyone’s chipmaker
Whoever wins the AI chip race, chip foundry giant Taiwan Semiconductor manufactures advanced processors for most of the leading designers. Owning the foundry means not having to guess which chip design comes out on top.
Demand has been climbing. Revenue was up 36% year over year in the second quarter, then 45% in July, and then 53% in August, a monthly record of NT$514.8 billion (about $16 billion). Notably, revenue through the first eight months of 2026 is running 39% ahead of the same period last year.
