Many AI stocks have not done well so far in 2026.
Spending on artificial intelligence (AI) is not slowing down, despite the market’s desire to do so. I expect this trend to continue for at least the next few years, as the data centers that many AI hyperscalers have announced will take years to build. This should be taken as a bullish indicator for several companies involved in AI, and investors should still maintain their exposure to this rapid growth trend.
I have five AI stocks that are definitely worth buying right now, and investors should consider buying them before their prices skyrocket.
Image source: Getty Images.
Nvidia
Nearly every list of AI stock picks includes Nvidia (NVDA +0.94%)and with good reason. It’s been the largest provider of AI computing units since the buildout started in 2023, and it doesn’t look like it’s going to slow down anytime soon. The company is continuously making improvements, highlighted by the launch of the latest chip architecture, Rubin. Rubin chips require four times fewer graphics processing units (GPUs) to train an AI model and ten times fewer GPUs to perform inference. Those kinds of improvements keep customers upgrading and buying from Nvidia, and we’re seeing that reflected in the company’s growth forecasts.
Today’s change
(0.94%)$1.77
Current price
$189.67
Key data points
Market capitalization
$4.6 tons
Day range
$185.95 -$190.33
Range of 52 weeks
$86.62 -$212.19
Volume
5.8 million
Avg. full
174M
Gross margin
70.05%
Dividend yield
0.02%
For fiscal year 2027 (ending January 2027), Wall Street analysts expect Nvidia to grow by 65%, compared to expected growth of 57% in fiscal year 2026. Demand for Nvidia GPUs continues to increase, keeping the company at the top of the AI buying list.
Taiwanese semiconductor manufacturing
Taiwanese semiconductor manufacturing (TSM +2.82%) similarly benefits from massive AI buildouts. It is the largest chip foundry in the world by revenue and a major supplier of chips to virtually every company involved in AI, including Nvidia. Taiwan Semiconductor is also experiencing strong growth this year, with sales growth of almost 30% expected in US dollars.
TSMC is a great neutral way to play the AI buildout because it doesn’t rely on one company to produce the best computing unit. It will thrive as long as there is more AI spending. With the big four hyperscalers planning to spend around $650 billion on capital expenditures this year, the company is positioned to cash in on these expenditures.
Broadcom
Broadcom (AVGO 0.46%) is an emerging competitor in the AI computing landscape. Some customers don’t want to pay a huge premium for Nvidia GPUs if they don’t use all the device’s features. Instead, they opt for an ASIC (application-specific integrated circuit) from Broadcom. These computing units are custom designed for a specific workload. While they are not as flexible as a GPU, they do offer comparable or better computing power at a much lower price.
Today’s change
(-0.46%)$-1.55
Current price
$332.44
Key data points
Market capitalization
$1.6 tons
Day range
$329.58 -$340.11
Range of 52 weeks
$138.10 -$414.61
Volume
717K
Avg. full
31M
Gross margin
64.71%
Dividend yield
0.73%
Demand for custom AI chips is exploding and management expects AI chip revenue to double in the next quarter. Broadcom is just getting started and is a fantastic alternative to Nvidia as a stock pick.
Microsoft
Microsoft (MSFT 0.31%) is in a strange place. It used to be one of the top AI stocks to own and trade at a premium, but investors are a bit skittish about it and have sold it off heavily in 2026. Now it’s trading for 24 times forward earnings, which is the cheapest it’s been in a while.
MSFT PE Ratio (Forward) data per YCharts
Nothing has changed in Microsoft’s investment thesis, and I think now is an excellent time to pick up one of the companies whose infrastructure is used to develop AI applications.
Alphabet
In place of Microsoft, Alphabet (GOOG +3.74%) (GOOGL +3.95%) appears to have increased. Alphabet has returned from near the bottom of the generative AI technology race to one of the leaders. Gemini is recognized as one of the best AI models and the Google Cloud platform is seeing impressive growth as a result. Alphabet is really at the top right now and could be the ultimate winner in the generative AI buildout.
Alphabet has strong prospects for the future and I am curious to see what AI innovations they can drive in the coming years. While the stock may not have as many upsides as the other four, I think it is an excellent foundation from which to build a portfolio.
Keithen Drury holds positions in Alphabet, Broadcom, Microsoft, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool holds positions in and recommends Alphabet, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
