The artificial intelligence (AI) stock market is currently sending mixed signals. Here’s how I read them.

The first quarter of 2026 has been tough for artificial intelligence (AI) stocks… or has it?

On the one hand, after years of explosive growth, share prices of some of the biggest AI stocks have actually fallen so far this year. Nvidia (NVDA +2.59%)for example, is down almost 5% year to date.

But AI spending shows no sign of slowing down. In fact, they are expected to grow faster than ever. And some AI stocks are soaring to new heights. It’s as if the market can’t make up its mind.

Here’s how I interpret the mixed signals the AI ​​stock market is sending, and how I plan to move forward.

What the market says

If you just look at the AI ​​hyperscalers – the largest publishers of AI – you will see a story similar to Nvidia’s. All their stock prices have fallen so far in 2026. Some are down only single digits: Google’s parent company Alphabet (GOOGL 0.39%) (GOOG 0.21%) has fallen only 2.5%, while Apple (AAPL +0.00%) And Amazon (AMZN +2.05%) have fallen 6.9% and 7.5% respectively. But Metaplatforms (META +0.22%) is down 12.9% year to date, and Microsoft (MSFT 0.59%) shares are down 23%!

Image source: Getty Images.

But if you look beyond the hyperscalers, you get a different picture. Many semiconductor stocks are up double digits, while the king of semiconductors, Nvidia, lagged. Taiwanese semiconductor manufacturing (TSM +1.40%) has increased by 13.7% this year. Analog chip maker Texas instruments (TXN 0.12%) has increased by 15.1%. And the company that makes most of the equipment used in the manufacturing of high-quality microchips, ASML (ASML +2.05%)has increased by 22.1%.

This doesn’t seem like 2026 will punish the 2025 winners. Vertiv (VRT +2.60%)a company that makes power and cooling systems for data centers has seen its shares rise 61.8% year to date, after gaining 42.6% in 2025. Micron Technologies (MU 0.23%) is up 32.3% so far in 2026, after a monster 239.1% gain in 2025. Both handily outperformed S&P500‘s return of 16.4% in 2025.

So why is the market still showering love on some AI companies and kicking others to the curb? This is what I think is going on.

Big spenders

Appreciation doesn’t seem to be a problem. Of the stocks I’ve listed, Micron has the lowest price-to-earnings ratio, while Vertiv has the highest, and both are outperforming the others. However, there appears to be a divide in the types of companies the market currently rewards.

Image source: Getty Images.

The companies those beating the market are largely manufacturing companies: chip makers with their own production factories and industrial equipment manufacturers. These are the companies that are received a large portion of AI spending. Meanwhile, the companies making the expenses — the hyperscalers and the The ‘fabulous’ semiconductor company Nvidia is collapsing.

However, those big spenders don’t just spend money: they expect big returns from their customers later. However, the impatient market seems concerned that they won’t ultimately get enough bang for their buck, so it rewards companies that clearly benefit in the short term.

But if, like me, you think AI is a sustainable long-term trend, now seems like a good time to buy the dip.