AI stocks remain in focus as Meta’s Muse draws attention to the computing hardware behind personal AI assistants. Citi raised its AMD price target, while HPE announced new AMD-powered servers and Applied Digital reported higher revenue.
Meanwhile, Ariel Investments co-CEO John Rogers pointed to consumer and entertainment businesses as alternatives if market interest shifts away from AI.
Wall Street investment managers favor chipmakers as a way to gain exposure to competing AI applications, according to Bloomberg. Paisley Nardini, head of investment strategy at Tema ETFs, compared changes in software leadership to 'a game of hot potato.' Her firm owns Meta shares, and she questioned how long Muse would retain the market’s attention.
The hardware outlook centers on computing demand across multiple applications. AI agents perform tasks through several steps, increasing demand for processors and supporting infrastructure. Citi expects personal assistants to expand the server processor market as companies deploy more services, with AMD among the businesses positioned to supply those chips.
On October 6, Citi analyst Atif Malik raised AMD’s price target to USD 800 from USD 575. He identified Meta as one of AMD’s largest server customers and projected the processor market could grow from USD 29 billion in 2025 to USD 300 billion by 2030. The figures represent Citi’s forecasts.
HPE announced four ProLiant Gen13 servers powered by sixth-generation AMD EPYC processors on October 7. The company designed the systems for AI agents, running trained AI models, data analysis and other business computing tasks. Its announcement extends AMD’s presence in enterprise servers alongside demand from large cloud operators.
Applied Digital also released fiscal first-quarter 2027 results on October 7, covering the quarter ended August 31. Revenue reached approximately USD 341.9 million, up 322% from a year earlier. The company reported an adjusted loss of USD 0.01 per share as it continued developing its data center business.
Separately, Applied Digital announced potential power capacity of up to one gigawatt in Finland on October 6. The project marks its first international development in the Nordic region. On October 2, it brought another 75 megawatts of AI infrastructure online at Polaris Forge 1.
Alphabet participates in AI through Google DeepMind, its Tensor Processing Units, Google Cloud and consumer platforms. Its operations span model development, specialised chips and services for businesses using AI.
The company also distributes AI products through its established internet services. Its position differs from chipmakers supplying external customers since Alphabet develops hardware and software while operating platforms through which it can offer AI services. Revenue growth, spending and product adoption remain measures of the business’s progress.
Rogers named OneSpaWorld, Madison Square Garden Entertainment, Sphere Entertainment and J.M. Smucker as businesses he favors. His selections cover cruise-ship wellness services, live entertainment and packaged food brands, offering exposure to spending outside AI infrastructure.
He said some consumer brands trade below 10 times expected earnings for next year. Rogers compared the market’s concentration in AI shares with the period before the 2000 internet-stock downturn, while acknowledging uncertainty over when investment leadership might change.
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