The AI Chip Race Needs Designers, Not Just Factories

One software name sits behind the chip buildout, and its latest forecast shows AI demand is reaching deeper into the stack.

May 29, 2026

The AI trade is moving past the obvious hardware winners. This edition’s long pick sits in the design layer, where chips are planned before they are built. As hyperscalers and semiconductor companies race to create custom AI hardware, the software used to design those chips becomes more valuable.

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Enterprise Software

Microsoft Wants To Control More Of The AI Stack

Microsoft (NASDAQ: MSFT) is expected to unveil a new family of in-house AI models at its upcoming Build developer conference, including a coding model designed to strengthen GitHub Copilot and compete more directly in the fast-growing AI developer market.

Additional models focused on reasoning, transcription, speech, and image generation are also reportedly on the way. Together, they represent one of Microsoft's greatest efforts yet to build AI technology under its own roof rather than relying primarily on outside partners.

GitHub Copilot Enters A New Competitive Phase

GitHub Copilot helped define the category, but competition has intensified as rivals like Anthropic and Google push aggressively into AI-powered software development.

Building specialized coding models gives Microsoft greater flexibility to improve performance, reduce dependency on external providers, and optimize tools directly for developers.

OpenAI Relationship Continues To Evolve

Microsoft remains a major OpenAI partner, but the company is clearly investing in multiple paths forward. Recent reports of AI acquisition discussions, new internal models, and broader AI investments all point toward the same objective: reducing reliance on any single provider while strengthening Microsoft's own capabilities.

AI leadership is no longer determined by access to one breakthrough model. Microsoft appears focused on building an entire portfolio of AI technologies capable of powering its products, cloud services, and developer ecosystem for years to come.

Artificial Intelligence

Meta Is Monetizing Its Ecosystem In A New Way

Meta Platforms (NASDAQ: META) appears ready to make subscriptions a much bigger part of its business. Reports suggest the company is preparing premium offerings across Instagram, Facebook, WhatsApp, and Meta AI, creating a broader paid ecosystem that stretches far beyond its traditional advertising model.

Premium social features, customization tools, enhanced engagement options, and advanced AI capabilities are all expected to play a role in the strategy.

AI And Social Platforms Start Converging

One of the most interesting parts of the plan centers around Meta AI. Paid AI tiers could offer more powerful image generation, video creation, and advanced capabilities for users willing to pay monthly fees. At the same time, premium social features could bring subscription mechanics directly into Meta's core platforms.

Many technology companies are now discovering that AI and subscriptions work well together. OpenAI, Snap, and others have already shown that users will pay for enhanced digital experiences when the value is clear.

Scale Gives Meta A Unique Advantage

Meta reaches more than 3.5 billion people across its family of apps, giving the company a distribution advantage few businesses can match. Even modest adoption rates could create meaningful recurring revenue streams that complement advertising and reduce reliance on the ad market alone.

Growth in social media is becoming harder to find. Building premium experiences, subscription products, and AI services could become one of Meta's most important growth engines over the next decade.

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Digital Marketing

Google Search Enters Its Biggest Transformation Yet

Google (NASDAQ: GOOGL) used I/O 2026 to make one thing clear: AI is no longer a feature inside search. AI is becoming search itself.

AI-generated answers are now taking center stage, giving users direct responses instead of sending them through pages of traditional search results. For years, businesses competed for visibility through rankings and blue links. Google is now shifting attention toward AI-generated summaries that sit above everything else.

Brands Face A New Visibility Challenge

A major consequence of this shift is that companies have less control over how they appear online. When an AI system summarizes products, services, reviews, or company information, brands may not fully understand what customers are seeing first.

Traditional SEO focused on rankings and traffic. AI search introduces a new challenge where reputation, context, and interpretation become equally important. Many businesses spent years optimizing for search engines. A growing number may now need to optimize for AI systems.

Google Expands Its AI Ambitions

Search remains Google's most important product, making this transition a massive strategic move. Competition from ChatGPT, Perplexity, Anthropic, and other AI platforms has accelerated the race to redefine how information is discovered online.

Google is responding by embedding AI directly into the heart of its ecosystem rather than treating it as a separate product. Winning the next era of search may no longer be about delivering the best links. Google is betting it will be about delivering the best answers.

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Recent Tech Movers

monday.com (NASDAQ: MNDY)

The Workflow Story Is Getting More Useful

monday.com fits this edition because it gives you AI inside everyday business execution, not another abstract productivity pitch. The company is positioning itself as an AI work platform that helps teams move from planning to execution, and management recently kept the investor conversation active with conference appearances after reporting first-quarter results.

The stronger point is that monday.com already owns a useful workflow layer. If AI improves automation, task routing, reporting, and cross-team execution, the product becomes stickier. This is the kind of software name that works when AI is built into the daily workflow instead of bolted on as a feature nobody opens twice.

The Takeaway:
Keep MNDY on the buy list for pullbacks. The company has the right workflow layer for practical AI adoption.

The Risk:
If AI features do not improve retention or expansion, the stock trades like another high-multiple software name with a nice demo.

Perion Network (NASDAQ: PERI)

Ad Tech Finally Has a Cleaner AI Angle

Perion is a smaller, more overlooked ad-tech name, but the latest numbers give the story a reason to be watched. The company said Outmax AI agent adoption spend rose sharply year over year, while CTV, digital out-of-home, and retail media also grew. Total revenue only increased slightly, so this is not a full breakout yet, but the growth engines are clearly doing the heavy lifting. 

That makes Perion a useful setup. The market has punished plenty of ad-tech names for being cyclical or inconsistent. Perion now has a cleaner argument: AI-led campaign tools and stronger high-growth channels can pull the business out of slow-growth territory.

The Takeaway:
Treat PERI as a tactical ad-tech rebound trade. The AI and CTV pieces are working, but total company growth still needs to catch up.

The Risk:
If the growth engines cannot offset slower legacy revenue, the stock stays cheap for a reason.

Pony AI (NASDAQ: PONY)

Robotaxi Growth Is Getting Harder to Ignore

Pony AI is the speculative name in this group, but the recent quarter gave investors a real operating signal. The company reported continued growth in robotaxi revenue, with fare-charging revenue rising sharply year over year and fleet deployment expanding. That is exactly what the market needs to see in autonomous driving: more paid usage, not just test miles and press releases. 

This remains a high-risk category. Robotaxi companies still face regulatory, safety, scaling, and capital intensity challenges. But Pony’s setup is improving because the business is moving from concept toward commercialization.

The Takeaway:
Trade PONY as a high-upside autonomy position. The revenue growth is real, but this is not a core holding yet.

The Risk:
If fleet expansion slows or regulators tighten approval timelines, the stock gives back momentum fast.

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The Long Pick: Synopsys (NASDAQ: SNPS)

The Chip Design Layer Is Becoming More Valuable

Synopsys gets the long slot because AI chip demand is moving directly into its wheelhouse. The company raised its fiscal 2026 revenue forecast to a range of $9.63 billion to $9.71 billion and lifted its adjusted profit outlook, citing strong demand for AI chip design software.

That matters because the AI buildout is no longer just about buying more GPUs. It is about designing more specialized chips for training, inference, networking, and custom hyperscale workloads. 

This is where Synopsys becomes important. Before an advanced chip gets manufactured, it has to be designed, verified, simulated, and optimized. That is the layer Synopsys helps power. As chip complexity rises, the design tools become harder to replace and more central to the customer’s roadmap.

Why This Setup Works

Synopsys is not trying to chase AI from the outside. It is already embedded in the chip design process. That gives it a cleaner position than many software companies trying to rebrand around AI demand.

The market is also moving toward custom silicon. Hyperscalers want more control over performance, cost, and power efficiency. Chipmakers want faster design cycles. AI agent engineers are starting to change how design work gets done. Synopsys is positioned across all of that.

The Elliott board-seat agreement adds another layer. Activist involvement does not automatically create value, but it puts more pressure on management to sharpen execution, business models, and capital allocation. That matters when the company is already exploring higher-cost AI tool packages and royalty opportunities tied to chips designed with its technology.

What Investors Miss

The easiest mistake is treating Synopsys like a slow-moving enterprise software company. It is better viewed as an AI infrastructure enabler. The company does not need to manufacture chips or own a data center to benefit from the buildout. It gets paid when customers need better tools to design the chips that power that buildout.

That is a strong place to be. AI chip demand is creating more complexity, not less. More complexity means more need for advanced design automation, verification, and simulation. Synopsys sits in that workflow before the rest of the supply chain even starts.

What You Should Do With It

Buy SNPS on pullbacks. The stock already has institutional attention, and the guide is stronger, so the cleanest entry comes on weakness rather than chasing. But the thesis is direct: the AI chip race increases demand for design software, and Synopsys is one of the companies best positioned to capture that spend.

The Takeaway:
Buy SNPS on weakness. AI chip demand is pushing value into the design layer, and Synopsys owns one of the most important seats in that process.

The Risk:
If chip design budgets slow or the market decides the raised guide is already fully priced in, the stock can trade sideways despite a strong long-term setup.

Everything Else

  • 💰 Spotting small companies before the headlines hit is the edge and a free report names a handful now.

  • ☁️ Zuckerberg says a Meta cloud business is on the table, which is one way to make all that AI spending look more useful.

  • 📊 Salesforce’s Benioff has a new turnaround plan, because Wall Street is done clapping for software without stronger growth.

  • 💻 HP beat estimates as AI PCs and Windows 11 upgrades helped demand, though memory costs are still hanging around.

  • 🪟 The Pentagon gave Microsoft a $9.7 billion deal to simplify software licenses, which is a very expensive way to clean up subscription sprawl.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.

Best Regards,
—Noah Zelvis
Tech Stock Insider