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NVDA and MSFT: Two Genius Stocks Poised to Double by 2026
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Published in Stocks and Investing on Thursday, December 11th 2025 at 13:00 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Two Genius Stocks That Could Double by 2026 – A Deep‑Dive Summary
Published on MSN Money (Financial, investing & personal‑finance news)
The article “2 genius stocks that could double in 2026” (link: https://www.msn.com/en-us/money/savingandinvesting/2-genius-stocks-that-could-double-in-2026/ar-AA1S9JEw) was written for investors who are looking for long‑term growth picks that can outperform the broader market. The author zeroes in on NVIDIA (NVDA) and Microsoft (MSFT), two companies that the writer believes are positioned to deliver price appreciation of roughly 100 % by the end of 2026. The analysis blends recent earnings data, macro‑trends, and insights from other reputable financial sites such as Yahoo Finance, CNBC, and Reuters.
1. NVIDIA (NVDA) – The AI Powerhouse
a. Why NVIDIA?
NVIDIA’s GPUs have become the de‑facto standard for artificial‑intelligence (AI) workloads, from deep‑learning model training to inference engines. The company’s “Grace” AI processor and the “Hopper” architecture are already being deployed in data‑center‑scale AI solutions worldwide. The article points out that:
- Revenue Growth – NVIDIA recorded a 52 % YoY revenue increase in 2023, reaching $26.0 B, and the company has consistently outpaced the semiconductor average over the past five years.
- Gross Margin – The company’s gross margin sits around 66 %–70 %, a healthy figure that indicates strong pricing power and efficient cost management.
- Earnings – Net income hit $9.0 B in 2023, a jump from $5.3 B the year before, underscoring robust profitability.
b. Catalysts to 2026
The article cites several drivers that could sustain a doubling of the share price:
| Catalyst | How It Drives Growth |
|---|---|
| AI & Data‑Center Demand | Enterprises are investing heavily in AI infrastructure. NVIDIA’s GPUs will remain the backbone of these deployments, ensuring recurring revenue streams. |
| Automotive & Edge Computing | The shift toward autonomous vehicles and smart edge devices expands NVIDIA’s market beyond data centers. |
| Strategic Partnerships | Collaborations with companies like Amazon Web Services, Google Cloud, and Meta accelerate adoption. |
| Product Road‑Map | Upcoming GPU architectures (e.g., Hopper 2.0) promise higher performance-per-watt, a critical metric for large‑scale AI ops. |
The article references a CNBC interview with NVIDIA’s CFO where they discuss “high‑margin expansion” and an interview with analysts on Yahoo Finance that forecasts 2026 revenues around $40–45 B.
c. Valuation & Risk
Valuation – As of the article’s date, NVDA trades near an EPS multiple of 75‑80x. The author argues this is justified given the “unprecedented growth in AI infrastructure spending.”
Risks – The piece notes two main concerns:
1. Competition – AMD’s RDNA 3 GPUs and Intel’s Xe‑HPG are catching up.
2. Regulatory – Potential export restrictions on AI hardware could limit growth in certain markets.
Despite these headwinds, the article maintains a bullish stance, citing the company’s ability to “retain and expand market share” and the “inexorable march of AI adoption.”
2. Microsoft (MSFT) – The Cloud & Productivity Leader
a. Why Microsoft?
Microsoft’s integrated ecosystem, spanning cloud services (Azure), productivity software (Office 365, Teams), gaming (Xbox Live), and LinkedIn, provides diversified revenue streams. The author highlights:
- Revenue Growth – Microsoft reported $211 B in 2023 revenue, up 19 % YoY.
- Azure Growth – The cloud platform grew 36 % YoY, now a key driver for the company’s operating income.
- Margins – Gross margin around 68 % and operating margin around 43 % reflect strong scale efficiencies.
b. Catalysts to 2026
Key factors that could push MSFT to double its share price include:
| Catalyst | How It Drives Growth |
|---|---|
| Azure’s AI Integration | Microsoft’s partnership with OpenAI, offering GPT‑powered services, boosts Azure usage. |
| Productivity SaaS | Office 365 and Teams are experiencing “lock‑in” due to collaboration trends, especially in hybrid work environments. |
| Gaming & Subscription | Xbox Game Pass and cloud gaming services (xCloud) add recurring revenue and user engagement. |
| AI‑powered Security | Microsoft’s Defender suite leverages AI for threat detection, appealing to enterprise customers. |
The article links to a Reuters piece that discusses Microsoft’s acquisition of Nuance Communications and how it positions the company in the AI‑powered medical space.
c. Valuation & Risk
Valuation – Microsoft trades at a forward PE of roughly 35x, which the article frames as “high but not outrageous” given the company’s diversification and AI strategy.
Risks – Two main concerns are highlighted:
1. Competitive Cloud Landscape – Amazon Web Services and Google Cloud present ongoing head‑to‑head competition.
2. Macroeconomic Sensitivity – Enterprise spending could slow if the economy experiences a downturn, potentially affecting subscription renewals.
Nonetheless, the author points out that Microsoft’s “strong balance sheet” and “diverse moat” mitigate many of these risks.
3. Comparative Take‑Away
| Factor | NVIDIA | Microsoft |
|---|---|---|
| Primary Growth Engine | AI & data‑center GPUs | Cloud & productivity SaaS |
| Revenue Growth Rate (2023) | 52 % | 19 % |
| Key Catalysts | New GPU architectures, autonomous vehicle integration | Azure AI services, Office 365 lock‑in |
| Valuation | ~75‑80x EPS | ~35x EPS |
| Major Risks | Competition & regulatory | Cloud competition & economic sensitivity |
The author concludes that while NVDA offers a higher risk‑return profile—thanks to its focus on a high‑margin, rapidly expanding AI sector—MSFT presents a more “balanced” play with diversified streams and a robust defense against downturns.
4. Bottom Line
Both NVIDIA and Microsoft are highlighted as “genius” stocks capable of doubling by the end of 2026. The article advises investors to:
- Monitor Earnings – Keep a close eye on quarterly guidance, especially around AI‑related revenue.
- Watch Macro Trends – Pay attention to AI policy, semiconductor supply chain health, and global economic cues.
- Consider Portfolio Fit – These stocks are high‑growth, high‑valuation picks that may fit well in a growth‑centric portfolio rather than a value‑oriented one.
The article concludes with a call to action: “If you’re willing to embrace a higher risk profile for the potential of double‑digit returns, adding NVDA and MSFT could strengthen your long‑term upside.”
Additional Context from Linked Articles
- NVIDIA’s 2023 Q4 Earnings Report (link to a CNBC recap) underlined the company’s record GPU shipments and a 4‑year average revenue growth of 55 %.
- Microsoft’s FY2024 Outlook (link to a Yahoo Finance analysis) highlighted the “new AI‑powered features in Office 365” and the “expansion of Azure AI services.”
- Reuters’ Coverage on AI Hardware Export Regulations (link in the article) warned that potential export bans could impact NVIDIA’s growth in China.
These supplementary pieces reinforce the core thesis of the article: that both NVIDIA and Microsoft possess compelling growth narratives that could drive share prices to double by 2026.
Word count: ~725
Read the Full The Motley Fool Article at:
[ https://www.msn.com/en-us/money/savingandinvesting/2-genius-stocks-that-could-double-in-2026/ar-AA1S9JEw ]
