Google Cloud is expanding rapidly, and analysts at Melius Research suggest that chipmakers and networking providers may offer stronger investment opportunities.
The firm points to companies supplying critical hardware for data centers as key beneficiaries of Google’s increased capital spending.
Google’s parent company, Alphabet, has been ramping up investments in cloud infrastructure to support artificial intelligence and other demanding workloads.
That surge in spending flows directly to semiconductor manufacturers and networking equipment vendors.
These suppliers provide the essential chips and connectivity gear that power Google’s massive data centers.
As cloud demand grows, these companies could see steady revenue gains tied to Google’s buildout plans.
Investors looking to capture the cloud trend may find these hardware specialists more attractive than Google itself.
