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Chips, clouds, models: the three layers of AI stocks

NVIDIA, Microsoft and Palantir do very different things. A quick map.

By TickPane Editorial

Published · 3 min read

“AI stocks” gets used as if it were one thing. It isn’t. The companies behind artificial intelligence sit in different layers, earn money in different ways and carry different risks. Here’s a quick map.

Layer 1: Chips

AI models are trained and run on specialised chips. NVIDIA designs the graphics processors most AI data centres use today. AMD and Broadcom make competing and custom chips, and TSMC manufactures chips for many of these designers.

  • How they earn: selling hardware to cloud providers and large companies.
  • What to watch: chip demand can be cyclical. When customers have bought enough capacity, orders can slow quickly, and these stocks can swing hard in both directions.

Layer 2: Clouds

Most businesses don’t buy AI chips themselves — they rent computing power. Microsoft (Azure), Alphabet (Google Cloud) and Amazon (AWS) run the giant data centres where AI is built and used.

  • How they earn: renting computing and storage, and selling software on top.
  • What to watch: they spend enormous sums on data centres. Investors watch whether that spending turns into enough new revenue.

Layer 3: Models and apps

This is the layer people actually see: chat assistants, coding tools, search features and business software. Some big platforms build their own models, while companies like Palantir sell AI-powered software that helps organisations use their data.

  • How they earn: subscriptions, licences and contracts.
  • What to watch: competition is fierce and changes fast. Today’s leader can be overtaken, and prices often assume a lot of future growth.

Why the map matters

The layers don’t always move together. A slowdown in chip orders can hit NVIDIA while barely touching a software company — and a price war between AI apps might not hurt the chip makers at all. If all your “AI exposure” sits in one layer, you’re less diversified than it feels.

It also helps to remember that many of these companies are among the largest in the S&P 500 and the Nasdaq. If you already own a broad index fund, you probably own a fair amount of AI already.

A calm way to follow the theme

  1. Decide how much of your portfolio you want tied to one theme.
  2. Spread it across layers instead of betting on a single name.
  3. Expect big swings — fast-growing stocks can fall 30–50% even when the long-term story holds up.

How TickPane helps

The AI Companies board starts with NVIDIA, AMD, Microsoft and Palantir, and you can add Alphabet, Meta, Broadcom or TSMC in a tap. Sectors goes further: the tech sector splits into sub-industries such as Semiconductors and Software Infrastructure, company by company. The AI Advisor’s ideas for your time frame come with a plain-language risk note.

Educational only. This article is for education only and is not financial advice. Company names are examples, not recommendations.