2 AI Pick-and-Shovel Stocks Poised to Be the Next NVIDIA

With the rise of artificial intelligence (AI), NVIDIA Corporation NVDA has experienced significant growth. Demand for its graphics processing units (GPUs) for powering new AI applications has increased among leading tech companies, while its cutting-edge Blackwell chips are also seeing exceptionally strong demand. 

However, in the first quarter of 2026, NVIDIA’s shares declined by over 5% amid geopolitical shocks that dented investors’ sentiment. Apprehensions emerged that a possible slowdown in AI infrastructure spending could derail the company’s growth trajectory, while stiff competition from rivals such as Advanced Micro Devices, Inc. AMD and Arm Holdings plc ARM raised concerns about potential pressure on its market share.

But “pick-and-shovel” AI players Applied Materials, Inc. AMAT and Lam Research Corporation LRCX capitalized on the AI boom, rising 33% and 24.8%, respectively, in the first quarter – defying the broader downward trend in the tech sector. Both companies are now well-poised to replicate NVIDIA’s long-term success, banking on a scalable business model. Let’s see in detail –

Applied Materials Leads in AI-Driven Semiconductor Growth 

Increasing AI investments are boosting sales of Applied Materials’ state-of-the-art semiconductor equipment. Gary Dickerson, President and CEO of Applied Materials, said that the company leads in high-performance, energy-efficient chip equipment, and is targeting 20%+ growth this year. The company has…