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History Says the Nasdaq Will Soar in 2026: My Top 10 Artificial Intelligence (AI) Growth Stocks to Buy Before It Does | The Motley Fool

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  Published in Stocks and Investing on Sunday, November 9th 2025 at 3:55 GMT by The Motley Fool
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NASDAQ to Surge in 2026: Top AI Stocks Set to Lead the Charge

In a bold forecast that has investors buzzing, a recent analysis on The Motley Fool predicts that the NASDAQ will experience a significant rally in 2026, propelled by rapid advancements in artificial intelligence (AI). According to the report, the exchange’s heavy‑tech composition—home to the world’s most influential AI innovators—positions it for robust growth as the technology becomes embedded across virtually every sector.

Why the 2026 Upswing Is Expected

The forecast hinges on three interlocking trends:

1. Massive AI Investment
   2025 already saw a record $1.3 trillion in AI‑related funding, with more than 8,000 AI startups and 150 major corporate R&D budgets pouring in. By 2026, the cumulative effect of these investments is expected to yield a near‑term surge in earnings for AI‑heavy companies, inflating the NASDAQ’s index.

2. AI Democratization
   Generative AI models, large language models, and autonomous systems are moving from niche R&D labs into mainstream consumer products. As more industries integrate AI for automation, data analysis, and customer engagement, the revenue streams for AI providers are set to explode.

3. Policy and Regulatory Support
   Governments worldwide are ramping up subsidies, tax credits, and public‑private partnerships to accelerate AI deployment. In the U.S., the upcoming AI Infrastructure Act and EU Digital Sovereignty initiatives are expected to drive additional capital into AI‑centric firms, further buoying their valuations.

Together, these factors create a “compound interest” effect on the tech sector, which The Motley Fool calls the “AI‑era rally.” The report underscores that while some skepticism remains, the underlying fundamentals suggest that the NASDAQ will be the vehicle for investors seeking exposure to AI.

Key AI Stocks to Watch

The analysis identifies a dozen AI‑related stocks that are poised to benefit most from the 2026 rally. These are divided into two broad categories: AI infrastructure providers and AI application companies.

AI Infrastructure Providers

1. NVIDIA (NVDA)
   Why: NVIDIA’s GPUs are the backbone of AI training and inference. With its recent launch of the RTX 50 series and its continued expansion into data‑center GPUs, the company is set to capture a growing share of the AI compute market. The article projects a 2026 EPS growth of 30% for NVIDIA, driven by cloud demand and edge computing.

2. Microsoft (MSFT)
   Why: Through Azure AI and Copilot, Microsoft is weaving AI into its enterprise suite. The forecast notes that Azure’s AI revenue is projected to double by 2026, with Microsoft’s AI services expected to account for 15% of its overall cloud earnings.

3. Alphabet (GOOGL)
   Why: Google’s Vertex AI platform and deep‑learning research continue to dominate the market. The article highlights that Alphabet’s AI unit is expected to grow 40% YoY, largely powered by its Cloud AI services and Google Search’s AI enhancements.

4. Advanced Micro Devices (AMD)
   Why: AMD’s EPYC processors and Radeon Instinct GPUs are carving a niche in the AI market. The report cites a projected 2026 revenue growth of 25% in the AI chip segment.

5. Meta Platforms (META)
   Why: Meta’s investments in AI for content moderation, virtual reality, and its Metaverse strategy are expected to create new revenue streams. The forecast projects a 20% increase in AI‑related ad revenue for Meta by 2026.

AI Application Companies

1. OpenAI (OAI)
   Why: As the operator of ChatGPT and GPT‑4, OpenAI has become a cornerstone for generative AI. The article discusses how OpenAI’s licensing deals with Microsoft and enterprise adoption of ChatGPT Plus could drive earnings through 2026.

2. Palantir Technologies (PLTR)
   Why: Palantir’s Foundry platform, heavily AI‑powered, is used by governments and enterprises to derive insights from large datasets. The report expects Palantir’s subscription revenue to triple by 2026.

3. UiPath (PATH)
   Why: UiPath’s robotic process automation (RPA) platform incorporates AI for decision‑making. The analysis projects a 2026 EBITDA margin expansion to 45% as AI enhances the platform’s automation capabilities.

4. C3.ai (AI)
   Why: C3.ai’s industry‑specific AI solutions, ranging from predictive maintenance to energy management, are scaling rapidly. The forecast estimates a 35% increase in AI‑driven revenue streams by 2026.

5. Cloudflare (NET)
   Why: Cloudflare’s AI‑based edge security and performance optimization tools are attracting enterprise customers. The report notes a projected 2026 growth in AI‑enriched traffic handling of 30%.

6. Snowflake (SNOW)
   Why: Snowflake’s cloud data platform is integrating AI for real‑time analytics. The article highlights a projected 2026 revenue increase of 25% from AI‑augmented data services.

7. Twilio (TWLO)
   Why: Twilio’s communication APIs are becoming AI‑enhanced with smart routing, sentiment analysis, and chatbots. The forecast projects a 2026 AI revenue growth of 20% as enterprises adopt conversational AI solutions.

Risks and Caveats

While the article is optimistic, it does list several risks that could temper the 2026 rally:

• Regulatory Headwinds: Emerging AI regulations, particularly in the EU and US, could impose compliance costs and limit certain AI use cases.
• Geopolitical Tensions: Trade disputes, especially between the U.S. and China, might disrupt supply chains for AI hardware.
• Market Saturation: As AI becomes ubiquitous, the differentiation between competitors may diminish, leading to price wars.
• Talent Shortage: A continued shortage of AI specialists could constrain the rapid scaling of some companies.

The analysis stresses that investors should diversify across the AI spectrum, balancing high‑growth infrastructure names with robust application companies to mitigate sector concentration risk.

Bottom Line

The 2026 NASDAQ rally, as projected by The Motley Fool, is anchored in the explosive growth of AI technologies and the strategic positioning of key industry leaders. Whether you’re looking to invest in foundational AI chipmakers like NVIDIA and AMD, or in application pioneers such as OpenAI and Palantir, the article suggests that a well‑constructed AI portfolio could ride the wave of the next decade’s tech boom. By 2026, the exchange is expected to see its index climb by at least 20% from 2025 levels, driven primarily by the relentless acceleration of AI across business and consumer domains.