Move over, software darlings. The future of tech is being etched in silicon, and chipmakers like NVIDIA Corp (NASDAQ:NVDA) and Broadcom Inc (NASDAQ:AVGO) are writing the playbook.

Howard Chan, founder and CEO of Kurv Investment Management, shared his exclusive insights with Benzinga, highlighting a sector where he said demand is outstripping supply: "We still favor the hardware or infrastructure side of the AI wave. Chipmakers and cloud computing service providers benefit from existing and future budgeted capital expenditure allocation."

Is The Nasdaq-100 Overheating?

Tech valuations have soared, leaving some investors wondering if growth can keep up.

"Consensus EPS growth is 21% for Nasdaq-100, up from 15% this year. That might be a tall order, but, after all, they have delivered this for the past... 20 years," Chan said.

Unlike other sectors buckling under high interest rates, tech titans boast robust balance sheets, giving them a cushion. Chan flags the second quarter as pivotal: "The base effect on EPS growth rates will be most obvious in Q2 when the rolling 12-month EPS might bottom."

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NVDA, AVGO: The Tech Titans To Watch

Hardware companies such as Nvidia and Broadcom are uniquely positioned to lead the AI boom, according to Chan. "The demand for compute still outstrips the ability of makers to meet that demand. There's small sign of new entrants. However, it will take time for them to catch up."

For investors tracking the sustainability of these gains, Chan offers a roadmap: "For hardware [NVDA/AVGO]: demand from the likes of TSLA/GOOGL/AMZN/META/MSFT."

AI: Beyond Tech

AI's impact isn't confined to tech. Chan sees a ripple effect, particularly in biotech and construction. "Directly, productivity will rise in service industries, although this might take a while as people need to be trained on it."

Indirectly, AI investments will cascade into non-tech sectors, like construction, as companies expand to meet rising demand, he said.

As the AI revolution heats up, Nvidia and Broadcom stand as the architects of the next wave, bridging the gap between soaring demand and supply constraints. With EPS growth expectations riding high and demand signals flashing green, the road ahead for tech's chipmakers may be paved in silicon gold.

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