2 AI Stocks to Watch in 2026 for Long-Term Growth

As the artificial intelligence (AI) market continues to surge, investors are eyeing stocks poised to capitalize on this transformative technology. Advanced Micro Devices (AMD) and Microsoft stand out as frontrunners, each leveraging their unique strengths to dominate the AI ecosystem. With AI driving demand across cloud services, data centers, and consumer markets, these companies are positioned to deliver significant returns over the next decade.

AMD's Diversified AI Portfolio

AMD enters 2026 with strong momentum across its key business lines. The company's data center revenue reached a record $4.3 billion in the third quarter, driven by insatiable demand for AI infrastructure. AMD's diversified portfolio, which includes central processing units (CPUs) and adaptive computing chips like field-programmable gate arrays (FPGAs), gives it a competitive edge in the AI market.

The company's Ryzen processors have gained significant market share against Intel in the consumer PC market, with client segment revenue hitting $2.8 billion in Q3, a 46% year-over-year increase. AMD's gaming business also saw a resurgence, pulling in $1.3 billion in revenue last quarter, nearly tripling year-over-year. While growth in consumer and gaming segments is expected to moderate, they remain solid contributors to AMD's top line.

Microsoft's AI Ecosystem

Microsoft's massive customer base and AI infrastructure make it a formidable player in the AI-driven economy. The company's cloud services, including Microsoft Azure, continue to see robust growth, with Azure revenue increasing 40% year-over-year in the latest quarter. Microsoft's subscription-based business model generates substantial revenue, enabling significant investment in AI innovation.

In the last year, Microsoft spent $69 billion in capital expenditures, all internally funded from its $147 billion in trailing cash from operations. These investments have enabled the development of world-class AI chips, systems, and cloud software, solidifying Microsoft's position as a leader in the AI market.

Both AMD and Microsoft are well-positioned to thrive in the AI-driven economy, offering investors compelling opportunities for long-term growth. As AI continues to reshape industries, these companies are at the forefront of innovation, poised to deliver wealth-building returns over the next decade.