Artificial intelligence (AI) investing remains in full swing, even halfway through 2025. Record data center spending has been announced, and all the major tech companies are following through with their plans, with some even expanding them. This bodes well for many players in the space and makes multiple companies excellent investments right now.

I've identified five companies that appear to be excellent buys in the AI arena, which I can categorize into two main areas: infrastructure and cloud computing. Both are well positioned to benefit from the massive demand for AI right now, a key part of my investment criteria.

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AI infrastructure investments will continue to be popular throughout the rest of the year

Companies that fall under the AI infrastructure investment umbrella are Nvidia (NVDA 1.28%), Broadcom (AVGO 1.90%), and Taiwan Semiconductor Manufacturing (TSM 0.75%). Their products are currently being used to facilitate AI training and inference, and are key beneficiaries of massive AI spending.

Nvidia needs no introduction, as its graphics processing units (GPUs) have powered the AI revolution from the start. There's no true competition in this space; only alternatives exist to prevent Nvidia from achieving outright market dominance. This bodes well for the future, as larger and larger data centers are being announced with Nvidia GPUs filling them.

One area where Broadcom may be able to displace Nvidia's GPUs is with its custom AI accelerators, which Broadcom refers to as XPUs.

XPUs can be configured to outperform GPUs when the workload they are fed is properly set up. By optimizing an XPU for a particular workload, Broadcom and its AI hyperscaler partners can create a more cost-effective and powerful computing device, albeit at the expense of flexibility.

AI hyperscalers are increasingly utilizing more XPUs to train and run inference for AI models, but Nvidia GPUs remain at the center of many data centers due to their flexibility.

There is plenty of room for both in the ongoing AI arms race, and each has a bright future ahead.

Both Broadcom and Nvidia utilize Taiwan Semiconductor (TSMC) chips in their devices. This should come as no surprise, as TSMC offers clients the most advanced chip technology alongside excellent yields.

As the demand for AI chips grows, that demand will trickle down to TSMC. This growth is fueling management's overall guidance for the next five years, which projects a compound annual growth rate (CAGR) of 45% for AI-related chips, with overall revenue expected to grow at a 20% CAGR.

There is huge demand for AI hardware, and these three companies are well positioned to capitalize on it. But so are a few cloud computing providers.

Cloud computing providers are seeing huge demand from AI workloads

AI giants like Alphabet (GOOG 0.51%) (GOOGL 0.54%) and Amazon (AMZN 1.62%) aren't just building data centers for their internal AI use; they're also building them to rent out to others. Many companies may have AI aspirations, but they likely lack the resources to build a state-of-the-art AI training facility. Furthermore, they may not have a use case that requires running it all the time, which is necessary to justify the cost.

Instead, companies can opt to rent computing power from cloud computing providers like Amazon Web Services (AWS) or Google Cloud. Furthermore, many companies are shifting non-AI workloads to the cloud and powering them with GPUs from providers like Nvidia. This demand is boosting the entire ecosystem, making stocks like Alphabet and Amazon excellent buys.

Grand View Research estimates that the entire cloud computing market will reach about $750 billion by 2024. However, it's expected to explode higher and have a projected market size of $2.4 trillion by 2030. That's huge growth that every investor wants a piece of, and owning Amazon and Alphabet is a great way to capitalize on this trend.