If you have $5,000 to invest that isn’t earmarked for bills or emergencies, we’ve compiled a list of potentially excellent stock options. These companies stand to gain significantly from the influx of funds directed towards artificial intelligence (AI) and appear set to thrive this year and beyond.
I think Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), Taiwan Semiconductor Manufacturing (NYSE:TSM), and Microsoft (NASDAQ: MSFT) are solid investments right now and are likely to outperform the market in the future.
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Nvidia, currently the world’s most valuable company by market capitalization, has surged due to heavy demand for its graphics processing units (GPUs), which are essential for training and operating AI models. The company has experienced robust growth over the past three years, and looking ahead to 2026, it seems to be another promising year.
Wall Street anticipates Nvidia’s growth will hit 52% in fiscal year 2027, which has just started. There are some worries among investors about a potential AI bubble forming, but the situation is quite different than that. Nvidia is essentially providing the tools for the AI surge. Even if this trend wanes, the fundamentals should hold firm. Given the expected strong growth, I’d consider Nvidia a must-buy.
Broadcom, another contender in the AI chip market, is approaching the competition differently. Instead of competing directly with GPUs, they’ve developed an ASIC (Application Specific Integrated Circuit), which is gaining traction among AI hyperscalers. ASICs are optimized for specific tasks, making them potentially more efficient than GPUs for certain AI-related workloads, and their cost is usually lower.
These chips are becoming increasingly sought after as AI hyperscalers lean into their purchasing clout. Broadcom is projecting a doubling of its AI semiconductor sales in the coming quarter compared to last year, significantly outpacing Nvidia’s anticipated growth. While Broadcom’s chips won’t eliminate the need for GPUs entirely, there’s ample opportunity for both companies to thrive.
TSMC is a key player in the AI sector with its advanced chip manufacturing abilities. Few companies can match TSMC’s technology and capacity to produce chips designed by firms like Nvidia and Broadcom, making it a crucial manufacturing partner for many in the AI arms race. This positions TSMC as a solid investment in AI advancements.
As long as investment in AI continues to rise, TSMC is likely to prosper. Most predictions suggest that AI spending will keep increasing until at least 2030, putting TSMC in a strong position. Analysts are forecasting growth of around 31% this year and 22% next year, which, despite some currency influences, still represents attractive potential for investors.
Microsoft plays a dual role in the AI landscape, utilizing both AI applications and infrastructure. Its Azure cloud platform has gained significant market share and swiftly rising revenue as a result. In the second quarter of fiscal 2026, Azure’s revenue surged by 39% year over year. With a substantial $625 billion backlog in this area, Azure’s growth prospects remain robust.
However, the market didn’t respond positively to certain aspects of Microsoft’s recent quarter, leading to a decline in stock prices. The company’s forward price-to-earnings ratio has dropped to 25, the lowest it has been in a while.
I view this as a rare buying opportunity for Microsoft shares. I think investors should consider jumping on this temporary dip.
Before making a decision on Nvidia stock, it’s worth noting the following:
Motley Fool Stock Advisor has highlighted stocks that they believe are worth buying right now, and surprisingly, Nvidia isn’t on that list. These stocks are seen as having significant return potential in the coming years.
It’s also interesting to reflect on some past stocks, like Netflix which was recommended back on December 17, 2004. If someone had invested $1,000 then, it would be worth around $443,299* today. Similarly, Nvidia was highlighted on April 15, 2005 and a $1,000 investment would have grown to about $1,136,601*.
What’s crucial here is that the Stock Advisor boasts an average return of 914%, compared to the S&P 500’s 195%. That’s a considerable advantage over the market.
*Stock Advisor will return on February 7, 2026.
