By Edward Sheldon, CFA
Publication Date: 2026-01-02 06:41:00
Image source: Getty Images
For three years now, artificial intelligence (AI) stocks like Nvidia (NASDAQ: NVDA) have been on the up. With AI technology going mainstream thanks to apps like ChatGPT and Gemini, the theme has dominated the market.
Can these stocks perform again in 2026? I think so. Below, I’ll explain why. I’ll also provide my target share price for Nvidia.
AI’s the real deal
Many investors today think AI’s overhyped. I don’t share their scepticism though. I believe we are in the early stages of a multi-year AI-powered tech revolution. In my view, AI’s going to disrupt every industry in the years ahead.
In 2026, I think we’re likely to see a lot of exciting developments on the AI front (that separate hype from reality) including:
- AI agents: I expect more companies to start using agentic AI solutions from the likes of Salesforce and ServiceNow (one recent survey found that 69% of global business leaders expect agentic AI to transform their operations in the year ahead). Early adopters could start to demonstrate productivity gains and material cost savings.
- New AI chips: Nvidia will be launching its next chip, Vera Rubin, in 2026. This is set to deliver a massive jump in performance.
- Physical AI: 2026 could be a blockbuster year for physical AI. Think self-driving cars and humanoid robots.
- Sovereign AI investments: In 2025, several countries invested heavily in AI infrastructure. I expect to see more…
