Kindig said in a recent note that shifting AI spends could create a massive opportunity for companies supplying the servers, CPUs, networking, and more.

  • Kindig said in her note that the clearest signal is coming from Nvidia, where its AI Clouds, Industrial and Enterprise business is growing faster than its hyperscaler segment.
  • She said that this matters because enterprises and neoclouds generally cannot afford to spend tens of billions developing custom AI chips.
  • Kindig added in her note that the opportunity gets broader as AI racks become more powerful and complex.

Artificial intelligence spending is entering a new phase, according to IO Fund’s Beth Kindig, who said that the next wave of infrastructure demand is increasingly coming from enterprises, neoclouds and sovereign AI customers rather than just the biggest cloud providers.

Kindig said in a recent note that this shift could create a massive opportunity for companies supplying the servers, CPUs, networking, storage and cooling needed to power increasingly complex AI deployments.

GOOGL stock is down 11% year-to-date and 1% over the past 12 months. The S&P 500 ETF (SPY) is up 11% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 12%.

The Next $1 Trillion AI Trade

Kindig said in her note that the clearest signal is coming from Nvidia Corp. (NVDA), where its AI Clouds, Industrial and Enterprise (ACIE) business is growing faster than its hyperscaler segment. ACIE revenue reached $40.3 billion in fiscal Q2, up 138.5% year over year, compared with 101.2% growth for hyperscalers.

Kindig estimates ACIE could overtake hyperscaler revenue within two to six quarters, depending on how growth rates develop.

She said that this matters because enterprises and neoclouds generally cannot afford to spend tens of billions developing custom AI chips. Instead, they are more likely to purchase ready-to-deploy systems from server manufacturers.

Kindig also highlighted Dell Technologies Inc.’s (DELL) recent forecast, where the company stated that it expects 200 gigawatts of AI data center growth through 2030, with enterprises, neoclouds and sovereign customers accounting for roughly half, with the opportunity being worth over $1 trillion.

These Stocks Could Capture the AI Infrastructure Boom

The analyst believes that Dell and Super Micro Computer Inc. (SMCI) stand out as direct beneficiaries because enterprise and neocloud customers tend to purchase complete AI infrastructure rather than individual components.

Kindig points to Dell’s 6,500 enterprise and neocloud customers, noting that more than half were added in the past three quarters. These customers also tend to purchase more storage and networking, increasing the value Dell can capture from each deployment.

“They tend to buy more storage, and they tend to buy more networking when they engage with us, a more complete solution.”

Super Micro could benefit from the same trend, particularly as demand shifts toward liquid-cooled, high-density AI racks.

Nvidia remains central to the opportunity, but Kindig’s thesis suggests investors should look beyond the hyperscaler-driven portion of its business. Meanwhile, Advanced Micro Devices Inc. (AMD) and Arm Holdings PLC (ARM) are opening another avenue for growth as rack-scale CPU systems emerge alongside traditional GPU infrastructure.

The AI Infrastructure Trade Is Moving Beyond GPUs

Kindig added in her note that the opportunity gets broader as AI racks become more powerful and complex.

She highlighted the emergence of rack-scale CPU platforms from Nvidia, AMD and Arm, which could increase the amount of networking, power delivery, cooling and storage required in each deployment.

Nvidia expects its server CPU market to reach $20 billion in fiscal 2027 and potentially double to $40 billion in fiscal 2028. Arm, meanwhile, continues to target $1 billion in AGI CPU revenue across fiscal 2027 and 2028, with a demand pipeline exceeding $2 billion.

At the same time, liquid cooling is becoming increasingly important as rack power consumption surges. Kindig cited TrendForce data, stating that liquid-cooling penetration among AI chips is expected to reach 59% in 2027, up from just 6% in 2023.

That creates potential opportunities beyond the server makers themselves, particularly for companies supplying cooling, storage, networking and power infrastructure.

Kindig argued that this combination of broader customer demand and rising rack complexity could mark a new growth phase for the AI server industry in 2027. She said that the bigger takeaway is that the next AI infrastructure winners may not be the companies spending the most on AI, but the companies selling the equipment needed to deploy it.

During the after-hours session on Friday, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, gained 0.19%; the Invesco QQQ Trust ETF (QQQ) rose 0.33%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) edged up by 0.1%. Retail sentiment on Stocktwits toward the S&P 500 ETF was in the ‘bullish’ territory at the time of writing.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<