The next big technology frontier and how to play it, according to Oppenheimer

Published Mon, Jun 7 20218:25 AM EDTUpdated Mon, Jun 7 20219:10 AM EDT

The next big technology frontier is artificial intelligence — and the hardware that powers it is a rapidly growing market, according to investment bank Oppenheimer. Oppenheimer predicts the market for artificial intelligence hardware could be worth $105 billion by 2025. AI refers to machines replicating characteristics and behaviors of human thinking. Advancements in semiconductors have accelerated development in AI computing through improved processing power. "Artificial Intelligence, once the stuff of science fiction, has arrived," Oppenheimer's Rick Schafer said in a note. "Investors have taken note and rewarded early leaders like NVIDIA." Companies like Nvidia are at the forefront of the technology, but Oppenheimer also identified other publicly traded businesses leading in AI silicon development. Take a look at its list: Oppenheimer calls Nvidia the "AI accelerator 800lb gorilla." In addition to its strength in the AI space, the chipmaker is also a leader in gaming and cryptocurrency mining. Shares of Nvidia have been on the rise recently, up 41.9% in the last three months and 34.7% this year. The company's first-quarter financial results released in May beat Wall Street expectations. "In our view, NVIDIA continues to be a thought leader," Schafer said. "Within the semiconductor space, NVIDIA was one of the first to recognize the AI market opportunity and notably pivoted its offerings to address the market more quickly than peers." Oppenheimer notes that Nvidia holds significant market share when it comes to GPUs — the number-crunching graphics processors used for AI, PC games and cryptocurrency mining. Intel , which made the world's first microprocessor, is the dominant player when it comes data center server processors, according to Oppenheimer. The company holds nearly 90% of market share for CPUs, or central processing units, Oppenheimer noted. AMD has gained some share in the CPU market but still trails Intel , Oppenheimer said. Shares of the semiconductor company are down 11% on the year but up 5% in the last three months. Qualcomm leads when it comes to mobile chip platforms, according to Oppenheimer. "Qualcomm's technology is well suited for edge AI applications, and should continue to see rapid growth," Schafer said. Broadcom , Marvell and Xilinx are among other AI silicon developers on Oppenheimer's list. — CNBC's Michael Bloom and Kif Leswing contributed reporting.

Nvidia headquarters in Santa Clara, California, Feb. 23, 2021.

David Paul Morris | Bloomberg | Getty Images

The next big technology frontier is artificial intelligence — and the hardware that powers it is a rapidly growing market, according to investment bank Oppenheimer.

Oppenheimer predicts the market for artificial intelligence hardware could be worth $105 billion by 2025.

AI refers to machines replicating characteristics and behaviors of human thinking. Advancements in semiconductors have accelerated development in AI computing through improved processing power.

"Artificial Intelligence, once the stuff of science fiction, has arrived," Oppenheimer's Rick Schafer said in a note. "Investors have taken note and rewarded early leaders like NVIDIA."

Companies like Nvidia are at the forefront of the technology, but Oppenheimer also identified other publicly traded businesses leading in AI silicon development. Take a look at its list: