Key insights
- Barclays identifies over a dozen networking and interconnect companies poised to benefit from a projected $1 trillion AI infrastructure buildout by Western hyperscalers and AI labs, exceeding current consensus by over $300 billion. This surge, driven by the AI arms race, highlights demand for components like Ethernet switching silicon, accelerators, optical fiber, and high-speed connectors. Key beneficiaries include Broadcom, NVIDIA, Cisco, Corning, Arista Networks, Amphenol, TE Connectivity, Lumentum, and Coherent Corp, signaling a significant growth
Investing.com -- Barclays has identified more than a dozen networking and interconnect companies positioned to benefit from surging AI infrastructure spending.
The firm’s technology analysts project that annual AI infrastructure expenditure from Western hyperscalers and AI labs could surpass $1 trillion, representing over $300 billion above current consensus estimates, with potential additional upside from sovereign AI initiatives and China before peaking in 2028.
This spending surge is driven by the ongoing AI arms race, fueling demand for digital and power infrastructure components.
Barclays has compiled a list of essential "pick and shovel" companies supporting this buildout, focusing specifically on networking and interconnect providers.
-
Broadcom – The company produces Ethernet switching silicon, custom AI accelerators, and fiber optic components for large-scale AI clusters.
-
NVIDIA – The chipmaker develops the Spectrum-X Ethernet platform, InfiniBand, and NVLink interconnects for high-efficiency AI clusters.
-
Cisco Systems – The networking giant offers Silicon One switching platforms and an optics portfolio supporting 800G LPO and ZR/ZR+ modules.
-
Corning – The materials specialist produces high-density optical fiber, cable, and connectivity solutions specifically for AI-enabled data centers.
-
Arista Networks – The company develops high-speed Ethernet switches and supports pluggable optics for AI scale-out and scale-up networks.
-
Amphenol – The connector manufacturer supplies high-speed connectors, power solutions, and fiber optic interconnects used in AI and machine learning systems.
-
TE Connectivity – The company supplies 800G/1.6T electrical and optical connectivity solutions, including backplane and high-speed data cables.
-
Lumentum – The optical components maker supplies high-performance indium phosphide lasers and optical transceivers for hyperscale AI clusters.
-
Coherent Corp – The company supplies high-performance optical transceivers, optical circuit switches, and other optical-based products for hyperscale AI data centers.
-
Celestica – The electronics manufacturer designs and manufactures 800G and 1.6T open networking switches for hyperscale AI data centers.
Barclays mentioned several more U.S.-listed companies from this segment, including Astera Labs, Marvell Technology, MACOM, Credo Technology, Fabrinet, Keysight Technologies, and Clearfield.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
ProPicks AI evaluates CSCO alongside thousands of other companies every month using 100+ financial metrics. Using powerful AI to generate exciting stock ideas, it looks beyond popularity to assess fundamentals, momentum, and valuation. The AI has no bias—it simply identifies which stocks offer the best risk-reward based on current data with notable past winners that include Super Micro Computer (+185%) and AppLovin (+157%). Want to know if CSCO is currently featured in any ProPicks AI strategies, or if there are better opportunities in the same space?