Two Stocks Worth Considering for Growth Investors
Investors are continuously searching for the next technological breakthrough, and recently, artificial intelligence (AI) has taken center stage. The excitement around AI stems from its potential to boost efficiency across various sectors, allowing companies to save on costs and accelerate innovation.
Many businesses focused on AI—either developing or utilizing the technology—are already enjoying significant revenue increases, catching the attention of investors. As AI stocks have spearheaded the rally in global markets, we’ve all seen some benefits, especially within the S&P 500. Predictions suggest that the AI market could soar into the trillions over the next few years, hinting at even greater opportunities ahead.
That said, the sheer number of AI stocks can feel daunting, making the selection process quite overwhelming. It’s essential to assess each company’s track record, competitive landscape, and future outlook. Keeping that in mind, two particular stocks stand out as promising AI investments for 2026. Let’s explore these options.
1. Nvidia
Nvidia (NVDA) is arguably the most recognized AI stock, primarily due to its stronghold in the AI chip market. The company specializes in graphics processing units (GPUs), which are crucial for tasks like training and executing large-scale language models. Tech giants have gained considerable advantages by entering the AI sphere early, and their commitment to innovation keeps them ahead of the game.
Nvidia has experienced remarkable revenue growth, with both sales and net income spiking in recent quarters. It has managed to set record revenue figures while positioning itself for future growth as it develops its chips for handling inference, which seems to be the next significant growth area in AI. Additionally, Nvidia is broadening its product and service offerings to cater to various AI needs.
Moreover, Nvidia’s strategic maneuvers are noteworthy. For instance, they’ve teamed up with Nokia, which is working on AI for communication, and acquired inference technology from the startup Groq. Given these developments, Nvidia looks poised for continued growth in the unfolding AI narrative, making it a strong buy for the upcoming year.
2. Amazon
Amazon (AMZN) operates as both a consumer and a provider of AI, which has positioned it favorably in the competitive AI landscape. The company harnesses AI to enhance its e-commerce operations, optimizing delivery routes and improving customer shopping experiences. By streamlining these processes, they not only ease customer interactions but also reduce operational costs, likely ensuring repeat business.
While it’s easy to think of Amazon as primarily an e-commerce giant, its major revenue driver actually comes from another sector: cloud computing. Through Amazon Web Services (AWS), the company is making significant strides in AI.
AWS, being the largest cloud service provider globally, offers a diverse range of AI tools and services—from Nvidia chips to its own cost-effective AI solutions, along with a fully managed AI service named Amazon Bedrock. These offerings have contributed to AWS achieving an annual revenue run rate of $132 billion.
Owning Amazon as an AI stock makes sense, especially given its consistent growth from both e-commerce and cloud activities. It doesn’t depend solely on AI for its earnings, but AI certainly provides a pathway for explosive growth in the years to come, enhancing its already promising outlook.
Currently, the stock trades at a reasonable 32 times forward earnings, positioning it as a compelling tech investment to consider for your AI portfolio.
