The Public Companies behind AI that nobody is talking about
Here’s how Applied Materials, Texas Instruments, and IBM are pushing the AI industry forward, while everyone is talking about NVIDIA.
Hey everybody! Welcome back to the Product Market Fit!
We are all paying close attention to OpenAI and Nvidia, but there’s much more going on behind the scenes.
So, today I wanted to do something different, and I asked my friend Max to write a short article for us.
Here’s a bit about Max:
Seasoned entrepreneur, dedicated father of three, and private investor specializing in high-yield dividend growth stocks.
Professional Background
Entrepreneurial Ventures: Founded and managed over 10 successful businesses across IT, media, and retail sectors.
Investment Experience: Over 15 years of experience in investments, with a portfolio surpassing $1.5 million.
Now let’s get to the article, let me know what you think of it and if you’d like more expert guest posts!
The Public Companies behind AI that nobody is talking about
While the world debates ChatGPT and image-generating neural networks, the true drivers of the AI revolution operate in silence. Their products rarely make headlines, yet they determine how powerful, efficient, and pervasive artificial intelligence will become in the coming years.
Beyond household names like NVIDIA, three under-the-radar American companies are building the physical and digital infrastructure that makes AI possible. They manufacture the impossible machinery, power the invisible chips, and develop the enterprise solutions that will sustain this technological leap long after the hype fades.
These companies aren't just participants in the AI race—they write its rulebook. Their technologies underpin every neural network, every smart device, every factory of the future. Most importantly, their business models aren't built on fleeting trends but on decades of sustainable growth.
Here are three critical players you should know:
Applied Materials - manufactures the equipment without which modern chips couldn't exist. No tools, no AI boom.
Texas Instruments - provides the "brains" for billions of devices, from industrial robots to medical sensors. Their technology will remain essential long after current trends fade.
IBM - is betting big on quantum computing and enterprise AI solutions that will redefine entire industries.
These aren't just technology companies. They're the foundation upon which all AI stands. And those who recognize their value today will be positioned for tomorrow's rewards.
Why AI?
💡 Invest in companies you believe in - W. Buffett
Because the future isn’t just digital—it’s intelligent. AI isn’t merely another tech trend; it’s the new electricity, rewiring how every industry operates. From designing life-saving drugs to optimizing global supply chains, artificial intelligence is becoming the invisible hand shaping our world. And the companies building its foundation—the chipmakers, the hardware innovators, the quantum pioneers—aren’t just participants in this shift. They’re the ones laying the tracks for the entire revolution. Forget "disruption." This is evolution at lightspeed, and these players are engineering its DNA. The real question isn’t why AI—it’s who’s building it right. And that answer starts here.
Applied Materials Inc (NASDAQ: AMAT)
Applied Materials Inc. (NASDAQ: AMAT) plays a key role in the global technology race for leadership in the age of artificial intelligence. The company is not merely a supplier of semiconductor manufacturing equipment — it is building the foundation for the next leap in computing power. As AI drives a dramatic increase in energy consumption, Applied Materials offers cutting-edge solutions focused on improving chip energy efficiency.
With technologies like Gate-All-Around transistors, hybrid bonding, 3D DRAM, and advanced materials such as the new Black Diamond™ dielectric and ruthenium- and cobalt-based interconnects, AMAT enables chipmakers to advance across critical dimensions — performance, power, area, cost, and time-to-market (PPACt™).
Investing $3.2 billion annually in R&D, the company develops proprietary innovation hubs (including the EPIC platform) and collaborates with leading industry players like AMD to co-develop solutions aimed at achieving a 10,000x improvement in performance per watt by 2040. Applied Materials is more than an equipment provider — it is a strategic architect of the AI-powered future.
Market Reality:
Controls 70%+ of deposition equipment for advanced chips
Every 10% improvement in chip efficiency = $20B+ in downstream AI cost savings
Startup Insights:
Opportunity: AMAT’s PPACt™ framework (performance-power-area-cost-time) reveals where next-gen AI chips must innovate. Startups aligning with these vectors (e.g., 3D chip stacking) gain inherent leverage.
Threat: The $5M+ price tag of AMAT’s tools means semiconductor startups face near-impossible capital barriers. Better to build on their roadmaps than against them.
Company history
Founded in 1967 in Santa Clara, California, Applied Materials has grown from a small startup into a global leader in semiconductor manufacturing equipment. Over its more than 55-year history, the company has played a pivotal role in advancing chip fabrication technology, enabling the growth of the electronics industry. Initially focused on basic semiconductor equipment, Applied Materials expanded through innovation and strategic acquisitions, becoming a key supplier to major tech firms like TSMC, Intel, and Samsung. Today, it stands as one of the most influential companies in the semiconductor sector, driving advancements in AI, IoT, and next-generation computing.
Why invest in Applied Materials?
5-year dividend growth: 83%
Consecutive dividend payments: 7 years
5-year average payout ratio: 16.65%
Projected 10-year dividend yield on cost (Max Ratio): 4.31%
How do the financials stack up?
Here is a quick dive into Applied Materials over last 2 years
Growth prospects
Applied Materials, Inc. is well-positioned for sustained long-term growth, driven by strong market demand, strategic investments, and technological leadership. The company operates in high-growth segments, with the semiconductor equipment market projected to reach $96.4 billion by 2026 at an 8.3% CAGR, and advanced chip manufacturing expected to grow even faster at 12.5% CAGR, reaching $57.8 billion. To capture this opportunity, Applied Materials is committing $5.4 billion to R&D and expanding its manufacturing footprint across the Asia-Pacific region. Revenue is projected to grow from $26.3 billion in 2024 to $28.9 billion in 2025, marking a year-over-year increase of 9.9%. With a patent portfolio of 18,500 active technology patents and a global presence in 17 countries, the company maintains a strong competitive edge. Ongoing collaborations with major semiconductor players, supported by $2.1 billion in partnership investments, further strengthen its growth trajectory in next-generation chip technologies.
Dividend yield for AMAT has fluctuated between approximately 0.6% and 2.1% over the past 10 years, with the average hovering around 1.25%.
Payout ratio for AMAT has ranged from about 12% to 36% over the past 10 years, with an average around 20%. The relatively low and stable levels in recent years suggest disciplined capital allocation and strong earnings growth.
Texas Instruments Incorporated (NASDAQ: TXN)
What is Texas Instruments Incorporated?
Texas Instruments Incorporated (TI) is a global leader in the design and manufacturing of analog and embedded semiconductor chips, playing a pivotal role in accelerating the adoption of artificial intelligence across industries. With a portfolio of over 80,000 products, TI provides the essential building blocks that power intelligent electronic systems—from autonomous vehicles and industrial automation to energy infrastructure and smart devices. By helping more than 100,000 customers solve system-level challenges, TI enables smarter data processing, more efficient power management, and precise sensing technologies. With a strong focus on sustainable manufacturing and innovation, TI delivers the tools and technologies that empower engineers to develop AI-enabled applications that shape the future.
Market Reality:
80% gross margins on industrial/auto chips prove analog > digital for AI at scale
Their 300mm wafer fabs operate at 95% utilization – no startup can match this capital efficiency
Takeaways:
White Space: TI dominates legacy sectors (factories, vehicles). Founders attacking new analog frontiers (biochips, ambient computing) avoid direct competition.
Lesson: TI’s 100,000+ SKU catalog shows how to commoditize innovation – build platforms, not point solutions.
Company history
Founded in 1930 as Geophysical Service Incorporated (GSI), Texas Instruments (TI) has evolved from a company focused on seismic exploration to a global leader in semiconductor technology. The company changed its name to Texas Instruments in 1951, marking its shift towards electronics and semiconductor innovation. TI was a pioneer in the development of integrated circuits, which revolutionized the electronics industry. Over the decades, the company has expanded its portfolio, becoming a key player in analog and embedded processing technologies. In recent years, TI has also contributed significantly to artificial intelligence with products like the TI C2000™ series of microcontrollers, designed for real-time processing tasks, and the TI TDA4x processors, which are used in AI and machine learning applications for automotive and industrial systems.
With a rich history of innovation, TI continues to drive advancements in fields like AI, power management, and sensing, impacting industries from automotive to industrial automation. Today, with a global presence and a focus on research and development, TI remains at the forefront of semiconductor innovation, shaping the future of technology.
Why invest in Texas Instruments Incorporated?
Texas Instruments is a proven Dividend Eagle, with a solid track record of consistently increasing its dividend payments over time.
The MaxDividends Top Stocks List features ~100 of the most reliable dividend companies in the U.S. market, each with 15+ years of consecutive dividend increases. These stocks are carefully selected based on MaxDividends' strict criteria for consistency and reliability.
10-year dividend yield on cost (Max Ratio): 12.61%
5-year dividend growth rate: 64%
Consecutive years of dividend payouts: 21+ years
5-year average payout ratio: 66.75%
How do the financials stack up?
Here is a quick dive into Texas Instruments over last 2 years
MaxDividends App: Texas Instruments Financial Statement. Revenue. Why it matters: Revenue is one of the most important indicators of a company’s performance because it shows how much business the company is generating. A rising revenue trend means the company is growing, which can be a good sign for investors looking for stable returns. On the other hand, if revenue is stagnant or falling, it could signal challenges or shrinking market share.
Growth prospects
Texas Instruments Incorporated (TXN) is well-positioned for significant growth in the semiconductor industry. The company is focusing on expanding its presence in key markets such as automotive semiconductors and industrial electronics. The automotive semiconductor market, in particular, is expected to grow rapidly, with a projected annual growth rate of 18.2%, potentially reaching $45.3 billion by 2026. The industrial electronics sector is also poised for steady growth, with a projected compound annual growth rate of 7.6%, reaching $32.8 billion by 2025.
In terms of product innovation, Texas Instruments continues to prioritize its embedded processing and analog products segments. The company’s embedded processing revenue was $7.8 billion in 2023, and its analog products segment generated $9.2 billion. TI's commitment to research and development is reflected in its $1.9 billion annual investment, ensuring that the company remains at the forefront of next-generation technologies.
To support its growth, TI is expanding its semiconductor manufacturing capacity and investing in advanced process technologies to improve efficiency and meet rising demand. The company is also developing next-generation analog and embedded processing solutions that are crucial for industries such as automotive, industrial automation, and consumer electronics.
TI’s competitive edge comes from its proprietary manufacturing technologies, which have led to a 15% improvement in cost efficiency, and its diverse product portfolio, which includes over 100,000 products. These advantages help TI cater to a wide range of industries and maintain its market leadership.
Financial analysts predict steady growth for TI, with expected annual revenue growth of 5.8% and earnings per share (EPS) growth of 7.2%. The company is also expected to capture an additional 2.3% of market share. Overall, Texas Instruments’ focus on innovation, market expansion, and operational efficiency positions it for continued success and growth in the semiconductor sector.
The dividend yield has declined from 4.00% to around 2.00–2.75% over the past decade, likely due to strong share price appreciation outpacing dividend growth, suggesting a focus on capital gains rather than high income.
The payout ratio has shown a declining trend from 100% to around 40-60% over the past decade, indicating improved earnings sustainability and a potential shift toward reinvestment or share buybacks rather than distributing all profits as dividends.
International Business Machines (NYSE: IBM)
IBM is a global technology leader with a strong focus on artificial intelligence (AI), offering enterprise-grade AI solutions through its watsonx platform. The company integrates generative AI, machine learning, and natural language processing into business workflows to enhance automation, productivity, and decision-making across industries like finance, healthcare, and IT. IBM collaborates with partners like AWS, Microsoft, and SAP to deliver scalable AI tools, from custom model development to ethical AI governance. With proven results—such as 150% higher customer satisfaction (NatWest) and 99% faster testing (Vodafone)—IBM helps businesses optimize operations, modernize applications, and transform customer experiences while prioritizing responsible AI innovation.
Market Reality:
4,500+ global enterprises already locked into IBM Cloud Paks
watsonx handles compliance/security burdens that kill most AI startups
Strategic Playbook:
Partner Path: IBM’s $2.8B partnership budget is easier money than enterprise sales. Their hybrid cloud install base = instant distribution.
Warning: If your AI startup targets banks/healthcare without a compliance moat, IBM will eat you via procurement.
Company history
International Business Machines Corporation (IBM) traces its roots back to 1911, when it was established as the Computing-Tabulating-Recording Company (CTR) through the merger of four companies. In 1924, it was renamed IBM and began its ascent as a global technology powerhouse. Over the decades, IBM played a central role in major technological revolutions—from developing the first magnetic storage devices to introducing the IBM System/360, which set computing standards for decades. As of 2024, IBM has been in business for over 110 years, evolving into a leader in AI, hybrid cloud, and quantum computing. Today, its strategic toolkits such as IBM Watsonx, IBM Cloud Pak, and IBM Quantum Services demonstrate its continued innovation and relevance in a highly competitive tech landscape.
Why invest in International Business Machines Corporation?
Growth: Achieved 9% growth in the last 5 years.
Dividend Consistency: Maintained a consistent dividend track record for 29 consecutive years.
Payout Ratio: 5-year average payout ratio at 150.29%
Financial Statement
Here is a quick dive into International Business Machines over last 2 years
Growth prospects
IBM’s growth outlook remains strong, driven by strategic investments in hybrid cloud, artificial intelligence, and quantum computing. The company aims to reach $30 billion in hybrid cloud revenue by 2025, while its $6.3 billion investment in AI and quantum R&D underscores a commitment to innovation. AI solutions alone are projected to contribute $20 billion to revenue by 2025. Strategic partnerships further enhance IBM’s market presence, with $4.5 billion allocated to cloud collaborations targeting a 15% market expansion, and $2.8 billion in AI partnerships expected to boost revenue by 22%. The company’s competitive edge lies in its 1,600+ quantum computing patents, a global enterprise client base of over 4,500 corporations, and AI research centers in 12 countries. Revenue is projected to grow steadily, from $61.7 billion in 2024 to $67.1 billion by 2026, reflecting increasing demand for IBM’s cutting-edge technologies.
Final Thoughts
Applied Materials, Texas Instruments, and IBM represent compelling but distinct investment opportunities in the AI revolution. Applied Materials (AMAT) is a key enabler of AI hardware, benefiting from the semiconductor boom—its focus on advanced chipmaking tools positions it for long-term growth as AI demands more powerful processors. Texas Instruments (TXN), with its analog and embedded chips, offers stability and steady dividends, appealing to investors seeking exposure to AI’s expansion into edge devices and industrial applications. Meanwhile, IBM stands out for its enterprise AI solutions, particularly watsonx, which could drive software and consulting revenue as businesses adopt generative AI.
For investors, the choice depends on risk appetite and sector focus:
Growth investors might favor AMAT for its cyclical upside tied to semiconductor capex.
Income-focused portfolios could lean toward TXN for its reliable dividends and resilient business model.
Those betting on AI software adoption may see IBM as a turnaround play if its AI services gain traction.
Diversifying across these leaders offers a balanced way to capitalize on AI’s hardware, infrastructure, and software layers—each critical to the technology’s future. As AI adoption accelerates, their differentiated strengths could deliver returns in different phases of the market cycle.
To your wealth, MaxDividends Team
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-Guillermo
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