Texas Instruments and Amtech Systems: 2 AI semiconductor plays to buy

AI infrastructure spending is driving a semiconductor upcycle that extends beyond GPU makers to analog and equipment suppliers.

Texas Instruments Inc. and Amtech Systems Inc. are positioned to capture the AI infrastructure boom as data center spending drives a semiconductor upcycle beyond GPU makers, with both companies offering exposure to analog chips and wafer fabrication equipment.

"AI infrastructure spending is driving a powerful semiconductor upcycle, but geopolitics and tariff risks remain," the Zacks report said, recommending Texas Instruments and Amtech as plays on the trend.

Texas Instruments, the Dallas-based analog chipmaker with a market capitalization of roughly $180 billion, supplies power management and signal chain components essential for AI data center infrastructure. Amtech Systems, a smaller equipment maker focused on thermal processing and wafer polishing, provides tools used in semiconductor fabrication. The two companies represent different points in the supply chain — TI as a chip supplier and ASYS as a capital equipment provider — giving investors diversified exposure to the AI-driven buildout.

The recommendation comes as global AI infrastructure spending is projected to exceed $200 billion in 2026, with data center operators racing to expand capacity. For investors, TXN and ASYS offer a way to play the AI theme without the premium valuations attached to GPU leaders like Nvidia Corp., which trades at more than 30 times forward earnings. Texas Instruments, by contrast, trades at roughly 22 times forward earnings, while Amtech's smaller scale offers higher growth potential but also greater volatility.

Beyond the GPU Trade

The semiconductor upcycle is broadening beyond the initial wave of GPU-driven demand. Cloud providers including Amazon Web Services, Microsoft Azure, and Google Cloud have committed more than $100 billion in combined capital expenditures for 2026, with a growing share directed at networking, power management, and cooling infrastructure — areas where analog and discrete components play a critical role.

Texas Instruments benefits from this trend through its vast portfolio of analog chips used in power conversion, signal processing, and embedded systems. The company operates its own manufacturing network, including 300-millimeter wafer fabs in Texas and Utah, giving it cost advantages over fabless rivals. TI's revenue from the industrial and automotive sectors has softened in recent quarters, but data center-related demand is emerging as a growth driver.

Amtech Systems, with a market cap of about $400 million, provides thermal processing equipment used in the production of silicon carbide wafers and advanced packaging. The company's tools are used in the fabrication of power semiconductors essential for AI data centers, where energy efficiency is a growing priority. Amtech's smaller scale means any acceleration in orders can have an outsized impact on its financial results.

Tariff Risks Remain a Wild Card

The US-China technology rivalry continues to shape the semiconductor sector, with export controls on advanced chips and equipment creating uncertainty for companies with exposure to Chinese customers. Texas Instruments generates roughly 20 percent of its revenue from China, while Amtech's customer base includes Asian foundries that could face supply chain disruptions. Any escalation in tariffs or export restrictions could weigh on both stocks, tempering the upside from AI-driven demand.

For investors seeking AI exposure beyond the crowded GPU trade, TXN and ASYS offer two distinct approaches. Texas Instruments provides stability and scale, with a dividend yield of about 2.5 percent and a history of returning capital to shareholders. Amtech offers higher upside potential tied to equipment cycle recovery but carries more execution risk. Both stocks could benefit as the AI infrastructure buildout enters a phase where the semiconductor supply chain sees rising demand.

This article is for informational purposes only and does not constitute investment advice.