Key Points
AMD and Dell are poised to profit from Meta’s increased spending on AI infrastructure.
Meta will utilize AMD’s Instinct GPUs and EPYC CPUs in its AI data centers.
Dell’s infrastructure business should benefit from new data centers and advanced chip setups.
Spending on artificial intelligence (AI) is not slowing, but remains hot at the start of 2026. Leading cloud providers are planning significant increases to their capital spending budgets in 2026, and the social media giant Meta Platforms is following suit.
During its fourth-quarter earnings call, Meta said it will spend up to $135 billion this year to support AI initiatives across its Superintelligence Labs and core business. This spells growing demand for top chip and server suppliers for the company's AI data centers.
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For investors interested in pick-and-shovel plays, here's why Advanced Micro Devices(NASDAQ: AMD) and Dell Technologies(NYSE: DELL) are poised to benefit from the AI spending boom.
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Advanced Micro Devices
Meta's stepped-up spending for 2026 is nearly double its total capital expenditures in 2025, and some portion of this increase could benefit AMD. Meta and AMD just announced a new deal to deploy AMD Instinct graphics processing units (GPUs) and AMD's new Venice EPYC central processing units (CPUs) starting in the second half of 2026.
This follows a similar deal AMD announced in the fourth quarter of last year with OpenAI. In a hotly contested market for the world's most powerful chips, these deals ultimately validate AMD's innovation with its data center chips. As CEO Lisa Su said, this new deal with Meta "places AMD at the center of the global AI buildout."
AMD is coming off a strong year. Full-year revenue grew 34% in 2025 to reach $34 billion. Notably, its data center revenue surged 39% year over year in the fourth quarter, driven by growing demand for Instinct GPUs and EPYC CPUs.
AMD's outlook calls for data center revenue to grow by more than 60% annually over the next three years. Despite this outlook, investors can still buy the stock at a reasonable price. Analysts are modeling 48% annualized earnings growth, and those estimates have also been increasing. This makes the stock's forward price-to-earnings multiple of 30 look attractive relative to growth.
Dell Technologies
Meta's capital spending underscores the need for more computing hardware as companies expand their data center capacity. This will not only benefit chip companies but also those that supply the servers that house the chips for data centers.
Dell is the world's leading server provider. It has a history of working with Meta on AI solutions, specifically on developing infrastructure for Meta's Llama AI models. This raises the likelihood that Dell could be a direct beneficiary of Meta's infrastructure buildout, alongside AI infrastructure spending across the tech sector.
Dell's server business has been booming in the past few years. Revenue from its infrastructure solutions group grew 24% year over year in the most recent quarter. Within that, servers and networking were up 37%. The AI server order backlog hit a record $12.3 billion in Dell's fiscal third quarter.
There is competition in the server market, but Dell's advantage lies in timely delivery and the customized setup of high-performance servers for large orders. A single mid-size data center can support thousands of servers, so each new data center that gets built adds up for Dell.
New data centers are also being built to handle more advanced chips, which require greater expertise in setup. This all requires high-value service that supports Dell's growth potential.
Dell is still nursing a slow-growing PC business, which accounts for close to half of its revenue. But the growth in infrastructure is enough to push the stock higher over time. Analysts expect earnings to grow at an annualized rate of about 14%, with Dell stock trading at a modest 12 times 2026 earnings estimates.
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John Ballard has positions in Advanced Micro Devices and Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy.
