All of the stocks listed here have market capitalizations over $1 trillion.
Although the company is one of the big players in the tech industry, its valuation in terms of earnings is still not very high.
10 stocks I like better than Alphabet ›
Worried that you missed out on the opportunity to make big profits from artificial intelligence (AI) stocks? There are still plenty of good, affordable AI stocks to add to your portfolio today. And many of them are already large, secure, and established players in the technology industry.
Here are three AI stocks that I think have the most upside heading into 2026. alphabet (NASDAQ:GOOG)(NASDAQ:Google), Amazon (NASDAQ:AMZN)and taiwan semiconductor manufacturing (NYSE:TSM). Here's why it's never too late to invest in these three tech giants.
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Some may be surprised to see Alphabet on this list. After all, the company is already one of the most valuable companies in the world. With a market capitalization of $3.7 trillion, it's not far behind the world's most valuable companies. Nvidiaworth $4.3 trillion. Once a company captures that value, it becomes difficult to continue growing.
Here's why Alphabet still looks like a great buy heading into 2026 can You can still go up. For some time, investors have been skeptical of the company's ability to maintain its dominance in its core search field, fearing that AI chatbots would drive users away from Google. And there may still be many skeptics in the world. That's why Alphabet isn't the most valuable company in the world right now, but I believe it should be ranked given the size of its business.
AI enables Alphabet to power Google Search and deliver value to YouTube creators. But don't forget that Waymo also has a rapidly expanding robotaxi business. The cloud business is expanding, and the company also manufactures its own chips.
Its business is much more diverse than many other AI stocks, including Nvidia. Still, Alphabet's stock trades at 28 times forward earnings. this is, Technology Select Sector SPDR ETF The average forward earnings multiple is just under 30x. Alphabet should command a much higher premium than its current stock price. Therefore, even at the current valuation, you can buy without hesitation for next year.
Another obvious candidate is Amazon, whose valuation is $2.4 trillion, firmly below both NVIDIA and Alphabet. Over the past 12 months, Amazon's stock price has actually increased. I refused Increased by 4%. This is another example of an AI stock that may deserve a higher valuation.
The company is primarily known for its online marketplace and its cloud business, Amazon Web Services (AWS), which has been an incredible growth engine. But in addition to that, Amazon also has its own robotaxi business called Zoox. Although not as big or popular as Waymo, Toaster-designed vehicles look sleeker and more modern, and may be more ideal for operating as robotaxis.
Amazon recently expanded its same-day delivery of fresh groceries to more markets, a move that could take some market share away from competitors. walmart. Amazon has done a great job predicting and predicting purchases on its online marketplace, and replicating that success with groceries could give the company an undervalued opportunity to leverage its AI capabilities to its advantage.
Given Amazon's diversified business and abundant growth opportunities, this stock should be worth more. The forward P/E ratio is 27x.
In contrast to the other giant technology companies mentioned above, it is also known as Taiwan Semiconductor Manufacturing Company (TSMC). The company's business is not very diversified, but that works to its advantage. TSMC makes chips for technology companies such as Nvidia. Due to low cost operation, intel and other rivals to compete with. The Taiwan-based company plays an important role in the world of AI due to the industry's dependence on foundries.
According to its latest quarterly report, TSMC's revenue for the quarter ended September 30 increased by 30% and diluted earnings per share increased by 39%. Not only is the company experiencing impressive growth, but it also boasts incredibly high operating margins of around 50%.
The company's stock has risen more than 40% this year, giving it a market capitalization of $1.5 trillion. However, with a forward P/E ratio of just under 24 times, it is the cheapest stock on this list.
Before buying Alphabet stock, consider the following:
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David Jagielski, CPA has no position in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Intel, Nvidia, Taiwan Semiconductor Manufacturing, and Walmart. The Motley Fool has a disclosure policy.
3 of the Best Artificial Intelligence (AI) Stocks to Buy in 2026 was originally published by The Motley Fool.
