microsoft unveils new tools as nvidia ships new models

Key Takeaways

• Broadcom, Microsoft, and Nvidia are predicted by Wall Street analysts to outperform Palantir Technologies in 2026.
• Broadcom has a record $73 billion AI-related order backlog, with AI chip revenue expected to double in early 2026.
• Oracle has a $523 billion revenue backlog for 2026, a 438% year-over-year increase, driven by commitments from Meta Platforms Inc. and Nvidia for Oracle Cloud Infrastructure services.
• Nvidia invested an additional $2 billion in CoreWeave Inc. and plans to launch its first standalone Vera-branded central processing unit (CPU).
• Meta Platforms' stock could rally 37% to $900 per share, fueled by its strong advertising engine and growing AI capabilities.
• Microsoft faces investor scrutiny over the near-term return on investment and margin impacts of its aggressive AI spending, despite Azure cloud business revenue rising 39% in fiscal Q1.
• Marvell Technology Inc. acquired XConn Technologies for $540 million and Celestial AI for $3.25 billion to enhance its AI chip offerings for data centers.
• British AI startup Synthesia raised $400 million in a new funding round for its AI avatar platform.
• Strong demand for AI-driven chips has caused memory and computer storage stocks like SanDisk, Micron, Western Digital, and SK Hynix to double or triple in value.
• Big tech companies plan to spend approximately $475 billion on capital expenditures in 2026, with investors demanding clear financial returns from AI investments.

Wall Street picks 3 AI stocks to beat Palantir in 2026

Wall Street analysts predict Broadcom, Microsoft, and Nvidia will outperform Palantir Technologies in 2026. Broadcom has a record $73 billion AI-related order backlog, with its CEO Hock Tan expecting AI chip revenue to double in early 2026. Microsoft, despite slower growth recently, shows strong analyst support and potential for a 38% upside. Nvidia continues to see soaring demand for its GPUs, with revenue jumping 62% in Q3 2025, and analysts expect its stock to rise significantly.

Two AI stocks to buy now for long term growth

Microsoft and Oracle are strong AI stocks to consider buying in January and holding for five years. Microsoft is seeing high demand for its Copilot AI assistants and Azure AI enterprise business, growing in the $390 billion cloud market. Oracle's cloud infrastructure business is accelerating, with a 68% year-over-year revenue increase, as companies seek servers and chips for AI training. Oracle's unique multicloud offering, which grew 817% in recent quarters, helps it compete in the expanding $159 billion cloud infrastructure services market.

Oracle boasts huge AI revenue backlog for 2026

Oracle is entering 2026 with an impressive $523 billion revenue backlog, known as remaining performance obligations, which grew 438% year over year. This massive backlog is largely due to new commitments from major customers like Meta Platforms Inc. and Nvidia for Oracle Cloud Infrastructure services. Oracle's cloud infrastructure revenue increased about 34% year over year, and the company reported $16 billion in revenue for its second quarter of fiscal 2026. While fulfilling these orders will require significant investment in data centers, this backlog positions Oracle for substantial long-term growth despite competition from Amazon Web Services, Microsoft Azure, and Google Cloud.

Analyst sees Meta stock rising 37 percent on AI and ads

Rothschild & Co Redburn analyst James Cordwell upgraded Meta stock to a buy rating, raising its price target to $900 per share. This suggests Meta's stock could rally 37% due to its strong advertising engine and growing AI capabilities. Cordwell highlighted Meta's "demand machine" in advertising, which can be improved with technologies like Andromeda, GEM, and Lattice. Meta is also set to capitalize on two key AI opportunities: developing agentic AI for experts and revolutionizing entertainment with AI video generation. The company's acquisition of AI agent firm Manus and its chief AI officer Alexandr Wang's expertise further strengthen its position.

Analysts are bullish on Meta due to AI and ads

Rothschild & Co Redburn upgraded Meta Platforms stock to a Buy rating, raising its price target to $900, as analysts are very optimistic about the company. Analyst Mark Kelley believes Meta's AI investments are successfully boosting demand for its advertising services. Meta aims to integrate AI across its platforms like Facebook, Instagram, and WhatsApp to improve ad targeting, content recommendations, and user experience. This focus on AI is a key factor driving future revenue growth and strengthening Meta's position in the competitive digital advertising market.

Big tech earnings to show if AI investments pay off

This week is crucial for U.S. markets as investors look for proof that massive AI investments are leading to profits. Roughly one-fifth of the S&P 500, including Apple, Microsoft, Meta Platforms, and Tesla, will report fourth-quarter results for 2025. The S&P 500 is currently priced high, so companies must meet or exceed earnings forecasts to maintain valuations. While overall earnings growth is expected to be 15% in 2026, investors are specifically demanding tangible financial returns from the billions poured into AI infrastructure. The Information Technology sector, especially semiconductors led by Nvidia, shows strong earnings growth and profit margins.

Big tech earnings reveal AI investment returns

Upcoming earnings reports from major tech companies will show if their huge AI investments are finally paying off. Microsoft, Meta Platforms, and Tesla report earnings on Wednesday, followed by Apple on Thursday. Investors grew skeptical at the end of 2025 about the hundreds of billions spent on AI, causing some "Magnificent Seven" stocks to lag. Companies like Sandisk Corp., Micron Technology Inc., and Western Digital Corp., which supply components for AI, have seen significant stock jumps. Microsoft's Azure cloud business, benefiting from AI demand, saw revenue rise 39% in its fiscal first quarter, with 36% growth expected for the second quarter. Big tech companies plan to spend about $475 billion on capital expenditures in 2026, and investors expect to see clear returns.

Nvidia invests 2 billion in CoreWeave and launches new chip

Nvidia Corp. invested an additional $2 billion in CoreWeave Inc., a key cloud computing customer, buying Class A common stock at $87.20 per share. This investment aims to help CoreWeave add over 5 gigawatts of AI computing capacity by 2030. As part of the deal, CoreWeave will be among the first to use upcoming Nvidia products, including storage systems and a new Vera-branded central processing unit (CPU). Nvidia CEO Jensen Huang stated this partnership aligns engineering work and speeds up computing capacity. This move marks Nvidia's first standalone CPU offering, challenging Intel Corp. and AMD, and highlights Nvidia's strategy of investing in customers to boost the AI industry.

Synthesia raises 400 million for AI avatar platform

British AI startup Synthesia raised $400 million in a new funding round for its AI avatar platform. The company creates artificial intelligence avatars for businesses to use in internal and external communications. Synthesia plans to use this capital to enhance its AI video platform, improve virtual communication offerings, and develop new enterprise products. The company believes future successful businesses will empower employees to use AI for automation and upskilling. This investment follows a previous $180 million funding round and aims to advance AI avatars that require natural language understanding, real-time rendering, and context-sensitive reasoning.

Marvell stock rises as AI chip demand grows

Marvell Technology Inc. stock climbed 1.5% to $81.44 in New York trading, driven by strength in the tech sector and anticipation of the Federal Reserve's announcement. Marvell supplies crucial networking and custom chips for cloud and AI data centers, making it a key indicator for AI spending. The company recently acquired XConn Technologies for $540 million to boost its PCI Express and CXL switch chip offerings for future AI systems. In December, Marvell also acquired Celestial AI for $3.25 billion, aiming to use its photonic "fabric" for scaling AI clusters with optical links. These acquisitions position Marvell for significant revenue growth in the coming fiscal years.

AI demand sparks boom in memory and storage stocks

Strong demand for AI-driven chips has caused a significant boom in memory and computer storage stocks. Companies like SanDisk Corp., Micron Technology Inc., Western Digital Corp., and SK Hynix have seen their stock prices double or even triple in recent months. Nvidia CEO Jensen Huang noted that holding the "working memory of the world's AIs" could become the largest storage market globally, highlighting the "insatiable need" for high-bandwidth memory in AI. This AI boom requires massive investments in infrastructure, energy, and skilled workers, making 2025 the biggest year for AI venture capital.

How to profit from AI stocks if a bubble bursts

As AI stocks have driven the S&P 500 higher, some investors worry about a potential AI bubble due to high valuations. However, strong corporate earnings and demand for AI products from companies like Nvidia and Taiwan Semiconductor Manufacturing currently do not support a bubble burst. To profit regardless of market changes, investors should diversify their portfolios across various stocks and industries. It is wise to include AI players that do not solely depend on AI for revenue, such as Amazon and Apple, and consider AI stocks with reasonable valuations like Meta Platforms. Investors should also align their AI stock exposure with their personal risk comfort.

AppLovin AI stock could surprise investors in 2026

AppLovin, a controversial AI stock, could deliver a strong performance in 2026 despite recent short-seller reports and a stock drop of over 20% this year. The company has continued to show strong growth, and major investors like Chase Coleman, Philippe Laffont, and Michael Lowenstein hold significant stakes. AppLovin is expanding its opportunities by introducing a self-serve ad manager, targeting international advertisers, and moving into new markets beyond mobile gaming. Management expects its gaming market to grow 20% to 30% annually, thanks to industry growth and improvements to its Axon 2 AI-based advertising technology.

Microsoft faces AI investment reality check

Microsoft Corporation faces an AI reality check as investors scrutinize the near-term return on investment and margin impacts of its aggressive AI spending. The company's stock has seen an extended pullback since late October due to concerns about the visibility of AI ROI. Significant capital expenditures for data centers and AI infrastructure, along with supply chain bottlenecks for hardware and rising energy costs, are straining current profitability. While Microsoft's core businesses like Office 365 and Azure remain strong, intensifying competition in AI services and a sluggish personal computing market add pressure. Investors may want to wait for clearer signs of sustained AI monetization and profit margin recovery before investing.

Sources

• 3 AI Stocks That Will Trounce Palantir in 2026, According to Wall Street
• 2 AI Stocks to Buy in January and Hold for 5 Years
• The AI Stock With a Monster Revenue Backlog Heading Into 2026
• Meta poised for nearly 40% upside on compelling AI and ad opportunities, analyst says
• Meta’s AI and Advertising ‘Demand Machine’ Has Analysts Bullish on the Stock
• A Make-or-Break Week for the AI Trade?
• Big Tech earnings will tell us if AI investments are finally paying off
• Nvidia Invests $2 Billion More in CoreWeave, Offers New Chip
• Synthesia Raises $400 Million for AI Avatar Platform
• Marvell stock climbs in New York trade as Fed week puts AI-linked chip names in play
• AI Demand Leads to Boom in Memory and Storage Stocks
• Is the AI Bubble About to Burst? Here's How to Profit Either Way
• This Controversial AI Stock Could Shock Investors in 2026
• Microsoft: The AI Reality Check Investors Can't Ignore