The Chip Stock Catching AI Demand Without Chasing the Hype

One overlooked semiconductor name just showed real AI-infrastructure demand, and the market finally noticed.

May 22, 2026

This edition is about tech names with real operating catalysts, not recycled AI slogans. The long pick stands out because it is not trying to become the next mega-cap chip story.

It is supplying the advanced analog and silicon photonics pieces that AI infrastructure still needs, and the latest quarter gave investors proof that demand is showing up now.

Early Trends (Sponsored)

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Streaming

Spotify Wants Users Creating Content, Not Just Streaming It

Spotify (NYSE: SPOT) just unveiled one of its most aggressive AI expansions so far.

The company introduced AI-generated podcasts, remix tools, creator software, and new subscription tiers while also partnering with Universal Music to allow AI-generated covers and remixes directly on the platform.

Streaming is starting to look very different. Spotify no longer wants to be seen as only a music app sitting quietly in the background while you skip songs during traffic.

The platform is moving toward interactive entertainment where listeners also become creators.

Music Streaming Evolves Into A Creator Business

Spotify is building a much broader ecosystem around audio and personalized media.

New tools like Studio by Spotify Labs allow users to generate customized content and automate creative workflows directly from prompts, while AI podcast features and memberships create new monetization layers for creators.

Pressure across the industry is rising fast.

YouTube, Netflix, Suno, and Udio are all pushing aggressively into AI-generated entertainment, forcing Spotify to expand beyond playlists and podcasts before competitors reshape user habits first.

Long-Term Growth Targets Get Much Bigger

Spotify also laid out ambitious targets through 2030 focused on margins, subscriptions, and higher-value revenue streams.

Audiobooks+, premium AI features, and creator monetization are becoming central to the company’s long-term roadmap.

Spotify is no longer trying to dominate music streaming simply. The company is trying to become the operating system for AI-powered audio, creator tools, and personalized entertainment.

Autonomous Vehicles

Waymo Faces A Reality Check In Self-Driving Expansion

Waymo & Alphabet (NASDAQ: GOOGL) has suspended robotaxi freeway rides across San Francisco, Los Angeles, Phoenix, and Miami after its vehicles struggled around construction zones.

The company said it is updating software systems before restoring highway operations. Surface street rides are still active, but freeway driving was becoming a critical part of Waymo’s long-term expansion strategy.

Faster airport trips, shorter ride times, and broader city coverage all depended heavily on reliable freeway performance.

Construction Zones Become A Serious Test

Autonomous driving systems perform best in predictable environments. Construction zones create the opposite.

Temporary lane shifts, cones, emergency changes, blocked exits, and inconsistent road markings force robotaxis to make rapid decisions in conditions that constantly change.

Videos showing Waymo vehicles struggling near construction sites have also started spreading online, drawing more attention to system reliability.

Flooding issues in Atlanta and San Antonio recently created another layer of problems, forcing separate operational pauses and software fixes.

Global Expansion Plans Face Harder Conditions

Waymo is still targeting aggressive global growth and aims to reach one million paid rides per week by the end of 2026. New robotaxi models and city launches remain part of the roadmap.

Scaling autonomous driving, however, becomes far more difficult once systems leave controlled environments and enter unpredictable real-world conditions.

Construction zones are no longer a side problem for the industry. They are becoming one of the biggest technical barriers standing in the way of robotaxis' mass adoption.

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Artificial Intelligence

Google Wants AI Running Quietly Behind Everything

Google (NASDAQ: GOOGL) just unveiled a massive expansion of AI agents across its ecosystem during I/O 2026.

New tools like Gemini Spark, Information Agents, Daily Brief, and Android Halo are designed to organize tasks, monitor information, manage schedules, and interact across products like Gmail, Chrome, Docs, and Android devices.

Google’s broader goal is becoming clearer. AI is no longer being treated like a standalone chatbot. The company wants AI operating quietly in the background across everything users touch.

AI Assistants Start Becoming Digital Managers

Google demonstrated agents organizing trips, monitoring inventory, summarizing inboxes, tracking topics online, and handling ongoing background tasks without being prompted each time. 

Much of the rollout, however, remains limited to high-paying AI subscription users for now. Multiple branding layers and overlapping AI products also created confusion around where each system actually fits.

Consumer AI Race Enters A New Phase

Google is betting heavily that AI agents will become the next major computing layer after search and apps.

Competition is rising quickly from OpenAI, Anthropic, Microsoft, and smaller AI startups building simpler assistant experiences through messaging and automation.

Consumer adoption may become the hardest part.

Most users still think of AI as chatbots and image generators, while Google is already pushing toward persistent agents that manage digital workflows in the background.

AI companies are no longer competing solely on smarter answers. Control over everyday digital behavior is becoming the real battleground.

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Recent Tech Movers

Toast (NYSE: TOST)

Restaurant Tech Is Turning Into a Profit Story

Toast keeps proving it is more than a restaurant software growth name.

The latest quarter showed stronger profitability, higher adjusted EBITDA, and better earnings power, which matters because investors are no longer rewarding software companies for revenue growth alone.

Toast is now showing that scale can turn into real margin expansion. 

The business still has a strong lane. Restaurants need payments, ordering, payroll, loyalty, and operating software in one place.

Toast owns that workflow better than most, and the platform keeps getting stickier as operators consolidate tools.

The Takeaway: Buy TOST on weakness. The profit story is now strong enough to support the growth story.

The Risk: If restaurant spending slows or location growth weakens, the stock loses its operating leverage case.

BILL Holdings (NYSE: BILL)

The Cost-Cut Story Got Serious

BILL is not a clean growth story right now. It is a restructuring story, and that is exactly why it deserves attention. The company posted third-quarter revenue growth, announced a major buyback, and moved to cut up to 30% of its workforce.

That is a sharp reset, but it tells investors management is done pretending the old cost structure still works. 

This is a tougher setup than Toast. BILL has to prove it can protect growth while taking costs out of the business. If it does, the stock has room to recover.

If it does not, investors will treat the buyback as financial cover for a slowing company.

The Takeaway: Keep BILL on the watchlist, not the front line. Buy only after the market sees evidence that cuts are improving profitability without breaking growth.

The Risk: Deep layoffs can create execution problems, customer-service issues, and weaker product momentum.

UiPath (NYSE: PATH)

Agentic Automation Gets a Real Test Next Week

UiPath belongs in this edition because it has a clear near-term checkpoint.

The company reports fiscal first-quarter results on May 28, and management’s guidance already gives investors a concrete benchmark for revenue, ARR, and operating income. 

The setup is simple. UiPath has spent years selling automation. Now it has to prove that “agentic business orchestration” is not just a rebrand.

If the company shows stronger customer demand around AI agents and workflow automation, the stock gets a better narrative. If the report is soft, the market will punish it fast.

The Takeaway: Trade PATH into earnings, but do not size it like a core software holding yet. The agentic automation story needs proof.

The Risk: If ARR growth disappoints, investors will see the AI-agent pitch as marketing before monetization.

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The Long Pick: Tower Semiconductor (NASDAQ: TSEM)

The AI Infrastructure Case Just Got Stronger

Tower Semiconductor gets the long slot because it just delivered the kind of quarter that forces investors to look again.

The company beat first-quarter expectations, posted year-over-year earnings and revenue growth, and guided second-quarter revenue above analyst estimates.

The stock surged to a record close after the report, with management pointing to advanced technologies, including silicon photonics used in AI infrastructure, as part of the demand story. 

That matters because Tower is not selling a fantasy. It is not asking investors to believe it will suddenly become the next headline AI chip designer.

It is a specialty foundry business with exposure to advanced analog, radio frequency, power management, imaging, and silicon photonics.

Those categories matter when AI infrastructure expands beyond GPUs into networking, sensing, connectivity, and power efficiency.

Why This Setup Works

Tower works because the stock gives investors a cleaner way to play AI infrastructure breadth. The market already knows the biggest winners.

The better question now is which second-layer suppliers benefit as the buildout spreads. Tower fits that answer.

Silicon photonics is the key piece. AI data centers need faster, more efficient data movement, and photonics is one of the technologies helping solve that bottleneck.

Tower does not need to dominate the whole AI supply chain. It needs to keep proving it has a valuable role in the parts of the chain where demand is accelerating.

What Investors Missed

The market often treats specialty foundries like cyclical chip suppliers first and strategic infrastructure enablers second. That framing is too narrow here.

Tower’s latest guide shows customers are spending, and the AI infrastructure connection gives the growth story more durability than a plain semiconductor rebound.

The stock has already moved hard, so the entry matters. But the thesis is better now than it was before earnings. This is no longer just a “semis are recovering” story.

It is a focused AI-infrastructure supplier story with numbers behind it.

What You Should Do With It

Buy TSEM on pullbacks. Do not chase a vertical move after the earnings spike, but keep the name high on the list.

The latest report confirmed demand, the guide supports the next leg, and the silicon photonics angle gives the stock a stronger identity.

The Takeaway: Buy TSEM on weakness. Tower is one of the cleaner under-owned ways to play the AI infrastructure supply chain.

The Risk: If AI infrastructure demand cools or the Q2 guide proves to be a peak rather than a trend, the stock gives back the rerating quickly.

Everything Else

  • 💰 Research analyzing past rate cut cycles has identified the 10 stocks positioned to surge first and a free report names all of them before the next wave of buying hits.

  • 🤖 Google I/O puts Alphabet’s AI strategy back under Wall Street’s microscope, because the market wants proof this spending spree can turn into dominance.

  • 💾 Seagate is riding the AI memory wave, showing that the data boom is not just a chipmaker story.

  • ⚡ Analog Devices is reportedly in talks to buy Empower Semiconductor for $1.5 billion, adding another deal to the AI power race.

  • 🖥️ U.S. national labs are looking beyond the usual chip giants for AI supercomputers, because the next compute race needs more than the obvious names.

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