Key Takeaways
- Artificial intelligence (AI) has had a significant impact on the stock market, with the potential to enhance productivity across various industries.
- Investors must delve into the details to determine whether a company is worth buying and holding, as many AI stocks look overpriced and risky today.
- Three potentially unstoppable artificial intelligence stocks to buy for 2026 are Figma, Alibaba, and Taiwan Semiconductor Manufacturing.
- These companies have strong growth potential, excellent competitive moats, and are investing in AI technology to drive future growth.
Introduction to AI Stocks
Few trends have had as big an impact on the stock market over the last couple of decades as artificial intelligence (AI). It has the potential to enhance productivity across various industries, ultimately leading to increased profits for shareholders. As a result, many investors are eager to invest in AI stocks, but it’s essential to be cautious and do thorough research before making any investment decisions. As the article states, "many AI stocks look overpriced and risky today. Investors must be willing to delve into the details to determine whether a company is worth buying and holding."
Figma: A Cloud-Based Design Software
Figma is a cloud-based design software company that provides tools for creating user interfaces and improving user experience development. The company has been making a significant push to integrate AI into its products, with CEO Dylan Field saying, "the first prompt is just a creative starting point, not the final destination." AI is an enhancement to Figma’s software, not a replacement. The company has released Figma Make, which enables users to rapidly generate design prototypes with natural language prompts, and has acquired AI image and video generation company Weavy. Figma’s market cap of $18.3 billion is notably lower than the $20 billion it had in 2022 when Adobe attempted to acquire the business, providing a good baseline on the value of the business.
Alibaba: A Diversified E-Commerce and Cloud Computing Company
Alibaba is a diversified company with a huge Chinese e-commerce business and a significant cloud computing segment. The company is investing in its own foundational large language model, which it provides to developers looking to build new AI software. Alibaba’s e-commerce business is under pressure, but the company is fighting back by investing in "quick commerce," which aims to deliver items within hours instead of days. Management is piling the cash flow from the retail business into cloud computing and AI, with accelerating revenue growth and strong adoption of AI products. As the article states, "Alibaba can maintain its market share of e-commerce in China, and its profitability will quickly recover as it scales up its rapid delivery operations."
Taiwan Semiconductor Manufacturing: A Leading Contract Chip Manufacturer
Taiwan Semiconductor Manufacturing (TSMC) is the world’s largest contract chip manufacturer, commanding 71% of all spending on third-party semiconductor foundries in the third quarter. The company benefits from a virtuous cycle where it wins big customer contracts, invests more in research and development, and then wins even more big contracts. TSMC has benefited greatly from the ramp-up in spending on artificial intelligence, but AI chips remain only a small portion of its total business. The company expects AI-related revenue to grow at a mid 40% annualized rate from 2025 through 2029, making its stock very attractive right now.
Conclusion and Investment Opportunities
In conclusion, while many AI stocks may look overpriced and risky today, there are still good long-term values that exist among AI stocks. Figma, Alibaba, and Taiwan Semiconductor Manufacturing are three potentially unstoppable artificial intelligence stocks to buy for 2026, with strong growth potential, excellent competitive moats, and significant investments in AI technology. As the article states, "good long-term values still exist among AI stocks," and investors who are willing to delve into the details and do thorough research can find attractive investment opportunities in the AI sector.
https://www.fool.com/investing/2026/01/08/unstoppable-artificial-intelligence-ai-stocks-buy/