Investing in AI: A Strategic Guide for Financial Advisors

Artificial intelligence is transforming the world of investing. To find opportunities and stand out from the competition, financial advisors need to stay informed on the evolving industry. 

When you have a deeper understanding of how to invest in AI, it can be easier to identify the right AI stocks and improve your business. Here are key insights to consider. 

Electrical equipment suppliers have emerged as the biggest winners from the surge in AI-driven investment, capturing the most revenue from data centers within the capital goods sector. Schneider Electric leads the pack with approximately $9.5 billion in data center revenue, which is more than 50% higher than its nearest competitor.  

For a deeper look at how AI investment is reshaping the capital goods landscape, download the full Powering Artificial Intelligence report. 

Vertiv ranks second and is the closest to a pure-play data center supplier, with more than three-quarters of its revenue coming from this market. Beyond electricals, exposure to data center spending is limited mainly to thermal and backup power providers such as Carrier, Johnson Controls, Trane, Daikin, Caterpillar, and Cummins. 

Data center construction has soared since the launch of ChatGPT, with spending reaching a record seasonally adjusted rate of $40 billion in June 2025, up 30% year-over-year following a 50% increase in 2024. Data centers now account for 40% of US office construction, up from just 15% in 2021, reflecting both the rapid expansion of AI infrastructure and declines in other commercial segments.  

This boom has driven the growth of electrical equipment suppliers to between two and four times their long-term average, far outpacing the roughly 4% historical growth rate seen since 1982. With AI data centers requiring more power and more complex infrastructure, analysts expect this momentum to continue, keeping electricals at the forefront of the capital goods sector’s AI opportunity. 

Artificial intelligence remains the defining growth engine for the semiconductor industry. In the latest Semiconductor Pulse: Q3 2025, global chip billings rose 23% in April 2025, led by the continued expansion of AI and a rebound in industrial demand. AI accelerators, chips that power large language models, already accounted for 20% of semiconductor revenue in 2024, and this share is expected to continue expanding as data center spending continues to surge. 

Nvidia remains at the center of this boom, supported by strong demand for its Blackwell and Blackwell Ultra products, while AMD, Broadcom, and Marvell are capturing gains through AI-specific partnerships. Meanwhile, industrial and automotive segments are emerging from a cyclical downturn, setting up a more balanced environment for 2026. 

Our top semiconductor picks highlight strength across both AI and industrial recovery themes. Infineon, NXP, and Onsemi are favored among analog and mixed-signal chipmakers for their exposure to automotive and industrial markets, where inventory levels are normalizing and long-term demand for higher chip content remains strong.  

In digital semiconductors, Marvell is the preferred pick for its expanding role in AI infrastructure, driven by partnerships with major cloud providers and sustained data center demand. These names are well-positioned to capture both the ongoing AI boom and the broader rebound in global semiconductor growth. 

Taiwan Semiconductor Manufacturing is the world’s leading outsourced semiconductor manufacturer, or foundry. Key customers include digital chip design behemoths such as Apple, AMD, Nvidia, and Qualcomm. We look at TSMC’s monthly revenue (both on a one-month basis and a three-month moving average) to gauge whether front-end manufacturing at the foundry may bode well for near-term revenue among the digital chip giants. 

TSMC generated 34% year-over-year revenue growth in the month of August 2025, representing 29% growth on a three-month rolling average. Demand for TSMC’s products is unyielding. The firm continues to benefit from growing adoption of Nvidia’s Blackwell products as well as order frontloading ahead of tariffs. Given TSMC’s dominance, we doubt the company would be hindered if it faced tariffs on shipments to US customers. 

We expect AI demand to stay resilient. Outside of AI, we see AMD continuing to gain PC processor (CPU) market share over Intel in both PCs and servers, which bodes well for TSMC as AMD’s primary foundry. Apple didn’t generate a smash hit product with the iPhone 16 cycle, and we’re not anticipating an iPhone 17 supercycle either, although early signs for iPhone Air demand appear promising. Still, holiday iPhone builds should support TSMC’s revenue for the remainder of 2025.

When it comes to the cybersecurity landscape, AI will be a new demand driver as attacks become more sophisticated. 

Although the AI security market is small right now, we expect rapid growth as the use of applications proliferates. And for good reason—our recent cybersecurity report suggests that the cost of a data breach is almost 50% higher for companies not using AI security compared with those that leverage these tools. 

Given that roughly 10% to 12% of public cloud spending is geared toward security solutions, we forecast the public cloud spending catalyzed by AI will add another $15 billion to $18 billion in security spending. 

Investing in AI can help advisors strengthen investment strategies and offer value. By knowing key considerations, you can choose AI stocks and meet investors’ evolving needs with confidence. Start your Morningstar Investor free trial today to unlock in-depth research, stock analysis, and portfolio insights.