Market sentiment on artificial intelligence (AI) is currently mixed. Although it was the top investment sector between 2023 and 2025, investors are less selective and skeptical in 2026. They see AI hyperscalers spending record-setting amounts on development capital, yet the return on this investment is yet to come (if at all).
Investors considering AI stocks need to be patient. The truth is, most companies haven’t started using AI on a day-to-day basis. Once they do, they will need more computing capacity than is currently available. Those who are passionate about the AI trend should view this short-term skepticism as a long-term AI buying opportunity.
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The use of AI is growing rapidly, but there are still many people who are not using it. Businesses are terrible, and according to a study by the Motley Fool, only 18% of businesses are currently using AI. This figure is expected to rise to 22% in the next few months, indicating rapid adoption. But businesses are still a long way from the AI startup we’ve been hearing about.
Larger firms have more technology and have a 27% usage rate, but that’s still less than half. There is clearly more room to use AI. AI computing services are currently lagging behind, even with limited adoption within the business community. As a result, there is still a huge opportunity to invest in AI.
We’re going to need more infrastructure, and that brings to mind three stock picks that could thrive.
By 2030, McKinsey & Company projects that nearly $7 billion in data center spending will be needed to meet the demand for AI computing. For reference, AI hyperscalers are expected to spend around $650 billion this year, so there is still a long way to go to meet the threshold needed to achieve this goal.
The two companies that will continue to develop are these Nvidia (NASDAQ: NVDA) again Taiwan Semiconductor Production (NYSE: TSM). Nvidia makes graphics processing units (GPUs), which have become the computing unit of choice for facilitating AI workflows. While there are alternatives out there, none have the full-stack capabilities that Nvidia’s GPUs have and the ability to move workloads from provider to provider. An investment in Nvidia is a bet that more GPUs are needed to process all the AI workloads that will come online — a very safe bet.
TSMC is no exception, as it makes most of the logic chips that go into the advanced computing devices that are often deployed in AI applications. While TSMC is Nvidia’s main chip supplier, it also produces chips for its competitors. This makes TSMC the last neutral investment in the AI sector, as it is a bet that spending will continue to rise, and there may be different computer unit suppliers that appear as better options than Nvidia, although not yet.
Another stock I work on is Microsoft (NASDAQ: MSFT). Microsoft offers many different software applications that include AI capabilities, and its platform will be a way for many companies to expand their use of AI. It also has one of the top cloud computing platforms, Azure. Azure is where developers can build AI models and manage them in the cloud, and this business unit has delivered impressive growth for Microsoft over the years. I don’t see that slowing down anytime soon, thanks to rising demand for AI, making its stock a great pick.
Businesses and consumers aren’t even close to expanding the use of AI, and that’s reflected in fewer AI investments. I think investors should use current investment AI to load up on stocks, as there has rarely been a better time to buy some of these discounted stocks than now.
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Keithen Drury holds positions at Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions and recommends Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a policy of disclosure.
1 Unbelievable Stats That Will Make Me Bull on AI Stocks was originally published by The Motley Fool.
