Bank of America sets AI stocks to buy list for 2026

AI chip stocks haven’t had the smoothest of rides lately, but Bank of America believes the bigger trend driving them is intact. In doing so, the investment bank's analysts are putting familiar names at the top of their AI stocks to buy list for 2026.Nvidia (NVDA), Broadcom (AVGO), and Lam Research (LRCX) are BofA’s three headline picks, as it argues that the powerful AI spending boom is still in its early innings.For perspective, four of the biggest tech giants in Microsoft, Amazon, Alphabet, and Meta dropped nearly $110 billion on AI-driven capex in Q3 alone.Bank of America's analysts make the case that 2026 is likely to be the midpoint in a major overhaul of global computing infrastructure, with companies upgrading systems to handle AI workloads. That view is also why the recent pullbacks in the bellwethers haven’t shaken conviction in the core narrative. So, the message is that while AI stocks could remain volatile in the near-term, the companies involved in the infrastructure boom are positioned to benefit immensely as spending continues to rise at an aggressive pace. BofA reveals AI stock picks for the 2026 cyclePhoto by BlackJack3D on Getty Images BofA sees AI spending as a long-term buildoutBofA isn’t buying the idea that AI spending has peaked out.More AI Stocks:Is Nvidia’s AI boom already priced in? Oppenheimer doesn’t think soWindows president told ‘Stop this nonsense. No one wants this’Michael Burry turns up heat on anti-AI betAI plays expanding role in predicting natural disastersMorgan Stanley revamps Nvidia’s price target ahead of big Q3Cathie Wood buys $16.2 million of sinking AI stockInstead, the bank argues that 2026 is perhaps when we’re in the middle part of the innings, describing AI adoption as a lengthy 8–10 year process, with businesses reworking traditional IT systems to support AI compute requirements.In fact, BofA expects AI chips to post another year of scoring 50% growth, spearheaded by “strong data center utilization, tight supply, enterprise adoption and the race between LLM builders, hyperscalers, and sovereign customers.” Also, it argues that there are plenty of near-term catalysts for AI bellwethers like Nvidia, including its popular CES and GTC conferences.They also tout Nvidia's top GPU rival, AMD, as another top AI-focused chip stock to keep tabs on.However, investors have grown a lot more focused on near-term returns, hyperscaler budgets, and cash flow discipline.Nevertheless, BofA sees those hiccups as part of a maturing cycle instead of a warning sign. Hence, from that angle, the uneven stock market performance doesn’t point to sluggish adoption; it’s the market effectively adjusting expectations as AI moves toward scaled deployment.Where Nvidia, Broadcom, and Lam fit in the AI cycleIt’s hard to make sense of what each company does in the AI chip boom, especially with so many headlines bombarding our feeds daily.Related: Netflix, Disney have unexpected streaming rivalNvidia’s a no-brainer in all of it. It basically sells the “brains,” with its potent GPUs that train and run AI models. On top of its hardware stack, it’s also pushing out software that makes it usable at scale. Broadcom plays a less visible but key role, too, supplying the networking and custom chips that let data move quickly inside AI-heavy data centers.Lam Research sits even further upstream, manufacturing the equipment chipmakers need to build advanced chips in the first place. That said, here’s a look at how each of these stalwarts performed in 2025 as the AI buildout continued.Nvidia (up 32% year to date)It was another massive year for Nvidia, marked by insatiable demand for its chips, along with more drama and receipts.Blackwell moved from hype to volume, taking data-center revenues to new heights as cloud giants kept ordering compute. Related: Microsoft sends harsh message to millions of Microsoft 365 customersIn April, it was dealt a blow when Washington threw a wrench into its plans, requiring licenses to ship Nvidia's China-tailored H20. Consequently, Nvidia took a massive $4.5 billion hit for excess inventory and commitments.Still, the market kept buying the narrative, and on July 9, Nvidia became the first company to reach a $4 trillion valuation (currently around $4.3 trillion).By November, Nvidia reported another solid quarter, backed by $57 billion in quarterly sales, with $51.2 billion from data center, along with $65 billion guide. Nevertheless, AI bubble fears have Nvidia stock stuck in a limbo, but most of Wall Street feels it's a temporary blip.Earnings snapshot: last four quartersFQ3 2026 (Oct 2025): EPS $1.30 (beat by 5 cents); Revenue $57.01 billion, +62.5% YoY (beat by $1.96 billion)FQ2 2026 (Jul 2025): EPS $1.05 (beat by 4 cents); Revenue $46.74 billion, +55.6% YoY (beat by $687 million)FQ1 2026 (Apr 2025): EPS 81 cents (beat by 6 cents); Revenue $44.06 billion, +69.2% YoY (beat by $807 million)FQ4 2025 (Jan 2025): EPS 89 cents (beat by 4 cents); Revenue $39.33 billion, +77.9% YoY (beat by $1.19 billion)Broadcom (up 47% year to date)Broadcom’s 2025 also had a superb year.On the semiconductor side, its powerful custom AI accelerators and data-center networking impressed, pushing AI-related sales to nearly $20 billion for the year.On the software end, VMware kept throwing off cash, providing Broadcom a much stronger and steadier base than its peers.However, by the end of the year, Wall Street got picky. In December, Broadcom posted another solid quarter of results, handily beating expectations and posting a record fiscal 2025 sales figure of $63.9 billion. However, it also warned margins might dip as AI chips become a bigger piece of the pie, and the stock sold off anyway.Earnings snapshot: last four quartersFQ4 2025 (Oct 2025): EPS $1.95 (beat by 8 cents); Revenue $18.02 billion, +28.2% YoY (beat by $556 million).FQ3 2025 (Jul 2025): EPS $1.69 (beat by 3 cents); Revenue $15.95 billion, +22.0% YoY (beat by $129 million).FQ2 2025 (Apr 2025): EPS $1.58 (beat by 1 cent); Revenue $15.00 billion, +20.2% YoY (beat by $28 million).FQ1 2025 (Jan 2025): EPS $1.60 (beat by 9 cents); Revenue $14.92 billion, +24.7% YoY (beat by $325 million).Lam Research (up 128% year to date)Lam Research remained the top “picks-and-shovels” player in the AI story.Nvidia is involved in chip sales, but Lam sells the tools helping fabs make them.These include things like etching, deposition, and the gear keeping yields higher as the chips get tinier. The numbers backed it up as Lam posted record fiscal 2025 sales of nearly $18.4 billion, then kept the ball rolling with a massive $5.32 billion September-quarter print (gross margins at around 50%).On top of that, the industry backdrop remained mostly conducive, with wafer-fab equipment sales expected to be strong again in 2026 as AI pushes more investment into logic and memory.Earnings snapshot: last four quartersFQ1 2026 (Sep 2025): EPS $1.26 (beat by 4 cents); Revenue $5.32 billion, +27.7% YoY (beat by $93.6 million).FQ4 2025 (Jun 2025): EPS $1.33 (beat by 12 cents); Revenue $5.17 billion, +33.6% YoY (beat by $167.2 million).FQ3 2025 (Mar 2025): EPS $1.04 (beat by 4 cents); Revenue $4.72 billion, +24.4% YoY (beat by $79.9 million).FQ2 2025 (Dec 2024): EPS 91 cents (beat by 3 cents); Revenue $4.38 billion, +16.4% YoY (beat by $63.0 million).Related: Palantir secures quiet contract win with big implications