One Trillion Dollar Business Opportunity Arrives! AI Begins Monetization—Are Supply Chain Stocks Now a Buy Signal?

Last week, Amazon and Microsoft released their earnings reports, both seeing significant stock price increases. The primary reason was that investors could see AI investments were already generating returns.

Amazon CEO Jassy stated that AWS server investments are expected to recover costs within two to three years, with servers having a lifespan of five to six years. AWS signs five-year leases, meaning Amazon’s AI server investments are profit-guaranteed, and data centers can operate for 30 years.

He also noted that computing power resources would be unable to meet customer demand in 2026 and 2027, and expressed strong optimism about 2028 demand, calling it "extremely astonishing." AWS cloud revenue grew 37% year-on-year last quarter to $42.2 billion, and the company remains optimistic that annual revenue could grow beyond one trillion dollars. Therefore, even though memory and other component price hikes pushed 2026 capital expenditures up from $200 billion to $220 billion, this remains a worthwhile investment.

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Microsoft similarly reported $41 billion in capital expenditure last quarter, yet operating cash flow rose 30% year-on-year to $55.4 billion, with free cash flow reaching $19.6 billion. Not only does AI investment drive rapid revenue growth, but it also maintains high free cash flow, providing a stable foundation for long-term capital spending.

Following global deleveraging and stabilized investor positioning, AI capital expenditure is now turning into profits. Market confidence is set to rebound. The U.S. Big Five cloud service providers (CSPs)—Amazon, Microsoft, Google, Meta, and Oracle—are projected to spend over $790 billion in capital expenditures in 2026, exceeding one trillion dollars next year. As Taiwan-based manufacturers serve as the primary supply chain for U.S. AI servers, they are poised to benefit directly.

Regardless of whether U.S. CSP servers use NVIDIA or AMD chips—or even self-developed AI ASICs—they will all be manufactured by TSMC. TSMC is actively expanding its capital expenditures, making TSMC and its supply chain key investment targets. As the Big Five CSPs continue increasing capex, investors should focus on key AI components. Consider the stocks listed below.

Investors should note that Taiwan stocks face resistance at the quarterly moving average line. The market will likely consolidate and form a second bottom before shifting into an uptrend. Don’t fear pullbacks—fear no pullback at all. During market corrections, strong and weak stocks will diverge. Resilient stocks will show anti-drawdown strength, offering investors the best timing for stock selection and positioning.

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TSMC Chain: TSMC (2330-TW), Creativity (3443-TW), Chung Sand (1560-TW), Yashine (6139-TW), Hsiang Ming (8091-TW), Hsiang Ming (8091-TW)

AI Performance Stocks: Molten Group-KY (3665-TW), Delta Electronics (2308-TW), Lite-On Technology (2301-TW), Chuan-Hu (2059-TW), AcBel Polytech (3017-TW), Wistron NeWeb (6669-TW), Foxconn (2317-TW)

PCB: Nanya PCB (8046-TW), Unimicron (3037-TW), Zhen Ding-KY (4958-TW), Taikwang Electronics (2383-TW), TTM Technologies Taiwan (6274-TW), Nan Ya Plastics (1303-TW), Kingboard Laminates (8358-TW)

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Source: Moore Investment Consulting – Analyst Yeh Chun-Min

The securities analyzed and recommended by our company involve no improper financial interests. Past performance does not guarantee future profits. Investors must make independent judgments, conduct careful evaluations, and assume investment risks accordingly.