Back to News
investment

Got $5,000? Here Are 5 Must-Buy Artificial Intelligence (AI) Stocks Right Now.

newsfeedback@fool.com (Keithen Drury)
Loading...
5 min read
0 likes
⚡ Quantum Brief
AI infrastructure spending remains robust in early 2026, defying market expectations, as hyperscalers commit $650 billion to data center builds over the next few years, signaling sustained demand for AI hardware and services. Nvidia dominates AI computing with its Rubin architecture, cutting GPU requirements for training by 75% and inference by 90%, driving 65% projected FY2027 growth as demand for its chips accelerates. Taiwan Semiconductor (TSMC) benefits as the neutral AI play, supplying chips to nearly all AI firms, with 30% revenue growth expected in 2026 amid surging hyperscaler capex. Broadcom’s custom AI ASICs gain traction as cost-effective alternatives to Nvidia GPUs, with management projecting AI chip revenue to double next quarter amid rising demand for workload-specific solutions. Microsoft and Alphabet emerge as AI leaders—Microsoft trades at a rare discount (24x forward earnings), while Alphabet’s Gemini and Google Cloud growth position it as a top generative AI contender.
AI Audio Summary
0:00 / 0:00
Click to play
463705f9-4a81-4f55-a5b6-c84dd4da6634.jpeg
Quantum News · Media Library

By Keithen Drury – Feb 21, 2026 at 12:30AM ESTKey PointsNvidia, Broadcom, and Taiwan Semiconductor are well positioned to cash in on the AI spending spree.Microsoft hasn't been this cheap in a long time.Alphabet is starting to emerge as an AI leader. These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: NVDANvidiaMarket Cap$4.6TToday's Changeangle-down(1.02%) $1.92Current Price$189.82Price as of February 20, 2026 at 4:00 PM ETMany AI stocks haven't done well so far in 2026.Artificial intelligence (AI) spending isn't slowing down, despite the market's wishes for it to do so. I expect this trend to persist for at least the next few years, as the data centers that many AI hyperscalers have announced will take years to build. This should be taken as a bullish indicator for several of the companies involved in AI, and investors should still maintain their exposure to this high-growth trend. I've got five AI stocks that are well worth buying right now, and investors should consider loading up on them before their prices rocket higher. Image source: Getty Images. Nvidia Nearly every list encompassing AI stock picks includes Nvidia (NVDA +1.02%), and for good reason. It has been the top computing unit provider in the AI realm since the buildout kicked off in 2023, and it doesn't look to be slowing down any time soon. It's making continuous improvements, marked by the launch of its latest chip architecture, Rubin. Rubin chips require four times fewer graphics processing units (GPUs) to train an AI model and 10 times fewer GPUs to perform inference. That kind of improvement makes customers continue to upgrade and purchase from Nvidia, and we're seeing that show up in the company's growth projections. ExpandNASDAQ: NVDANvidiaToday's Change(1.02%) $1.92Current Price$189.82Key Data PointsMarket Cap$4.6TDay's Range$185.94 - $190.3352wk Range$86.62 - $212.19Volume178MAvg Vol174MGross Margin70.05%Dividend Yield0.02% For fiscal year 2027 (ending January 2027), Wall Street analysts expect Nvidia to grow at a 65% pace, up from the projected 57% growth in FY 2026. Demand for Nvidia GPUs is continuing to accelerate, keeping it at the top of the AI buying list.

Taiwan Semiconductor Manufacturing Taiwan Semiconductor Manufacturing (TSM +2.68%) is similarly benefiting from massive AI buildouts. It's the world's largest chip foundry by revenue, and is a key supplier of chips to nearly every company involved in AI, including Nvidia. Taiwan Semiconductor also sees strong growth this year, with revenue growth of nearly 30% in U.S. dollars expected. TSMC is a great neutral way to play the AI build-out, as it's not reliant on one company to produce the best computing unit. It thrives as long as there is increased AI spending. With the four major hyperscalers planning on spending around $650 billion on capital expenditures this year, it's positioned to cash in on this spending. Broadcom Broadcom (AVGO 0.46%) is an emerging competitor in the AI computing landscape. Some customers don't want to pay a massive premium for Nvidia GPUs when they don't use all the features packed into the unit. Instead, they're opting for an ASIC (application-specific integrated circuit) from Broadcom. These computing units are custom-designed for a specific workload. While they aren't as flexible as a GPU, they do offer similar or better computing power at a much lower price point. ExpandNASDAQ: AVGOBroadcomToday's Change(-0.46%) $-1.55Current Price$332.44Key Data PointsMarket Cap$1.6TDay's Range$329.58 - $340.1152wk Range$138.10 - $414.61Volume717KAvg Vol31MGross Margin64.71%Dividend Yield0.73% Demand for its custom AI chips is exploding, and management projects revenue from AI chips to double in its upcoming quarter. Broadcom is just getting started and is a fantastic alternative to Nvidia as a stock pick. Microsoft Microsoft (MSFT 0.31%) is in an odd spot. It used to be one of the premier AI stocks to own and traded at a premium, but investors are a bit skittish about it and have sold it heavily in 2026. Now, it trades for 24 times forward earnings, which is the cheapest it has been in some time. MSFT PE Ratio (Forward) data by YCharts Nothing has changed in the Microsoft investment thesis, and I think right now represents an excellent time to scoop up one of the companies whose infrastructure is being used to build out AI applications.

Alphabet In Microsoft's place, Alphabet (GOOG +3.66%) (GOOGL +3.95%) seems to have risen. Alphabet has come back from near the bottom of the generative AI technology race to among the leaders. Gemini is recognized as one of the top AI models, and its Google Cloud platform is seeing impressive growth as a result. Alphabet is truly at the top of its game right now and could become the ultimate winner in the generative AI buildout. Alphabet has strong prospects moving forward, and I'm excited to see what AI innovations they can drive over the next few years. While the stock may not have nearly the upside as the other four, I think it's an excellent bedrock to build a portfolio on. Read NextFeb 21, 2026 •By Jose NajarroNvidia Shareholders Received Amazing News From Meta PlatformsFeb 21, 2026 •By Keithen Drury1 Genius Stock Up Nearly 27,000% in the Past Decade to Buy NowFeb 20, 2026 •By Robert IzquierdoShould You Buy Nvidia Stock Before Earnings?Feb 20, 2026 •By Justin Pope2 Millionaire-Maker Technology StocksFeb 20, 2026 •By Keithen DruryMy Top Artificial Intelligence (AI) Stock to Buy in 2026Feb 20, 2026 •By Trevor JennewineBillionaire Philippe Laffont Sells Nvidia Stock and Buys a Stock-Split Stock Up 20,000% in 20 YearsAbout the AuthorKeithen Drury is a contributing Motley Fool technology analyst covering AI, semiconductors, cybersecurity, and SaaS stocks. In addition to The Motley Fool, Keithen is a mechanical engineer and has held roles at Honeywell and smaller industrial companies like Brand Hydraulics and Lincoln Industries. He holds a bachelor’s degree in mechanical engineering from Dordt University.TMFTripleOptionStocks MentionedNvidiaNASDAQ: NVDA$189.82 (+1.02%) $+1.92BroadcomNASDAQ: AVGO$332.44 (0.46%) $1.55MicrosoftNASDAQ: MSFT$397.24 (0.31%) $1.22AlphabetNASDAQ: GOOGL$314.81 (+3.95%) $+11.96Taiwan Semiconductor ManufacturingNYSE: TSM$370.04 (+2.68%) $+9.65AlphabetNASDAQ: GOOG$314.67 (+3.66%) $+11.11*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Read Original

Tags

government-funding

Source Information

Source: The Motley Fool

Discussion

0 professional contributions

Sign in to join this professional discussion.

Be the first to add a constructive contribution.