Nvidia invests $2 billion while Microsoft Azure grows 40 percent

Key Takeaways

• Nvidia announced a US$2 billion investment and multi-year partnership with Synopsys for AI-driven chip design.
• StepStone Group led a $200 million investment round for Upscale AI, focusing on AI networking infrastructure.
• Big Tech companies plan to invest $530 billion in AI infrastructure in 2026.
• Microsoft's Azure cloud service grew 40% in Q3 2025, with AI services significantly contributing to this acceleration.
• AI chip suppliers like AMD and Nvidia are experiencing strong returns due to increased AI infrastructure investments.
• Thomson Reuters launched ONESOURCE Sales and Use Tax AI to improve sales tax compliance.
• Elastic released new Agent Builder and Workflows, enhancing its AI and automation offerings.
• AppLovin's AI platform, Axon, is outperforming competitors like Meta Platforms in advertising campaigns.
• The generative AI market is projected to grow from $71.4 billion in 2025 to $890.6 billion by 2032.
• Companies like Eagle Materials and TopBuild are expected to benefit from the construction of AI data centers.

StepStone Group invests in AI and senior housing

StepStone Group (STEP) recently led a $200 million investment round for Upscale AI, focusing on AI networking infrastructure. The company also launched a new senior housing project with Blue Moon Capital Partners. On January 23, 2026, StepStone's shares traded at US$75.39, showing strong short and long-term gains. However, its price-to-sales ratio of 3.9x suggests the stock is overvalued compared to its estimated fair value of 0.8x, and the company reported a net loss of $615.1 million.

Thomson Reuters launches new AI tax tool

Thomson Reuters (TSX:TRI) introduced ONESOURCE Sales and Use Tax AI on January 23, 2026. This new tool aims to speed up sales tax compliance and reduce audit risks for tax teams. Despite recent share price declines, the company's stock at CA$168.06 is considered undervalued by some, with a fair value estimate of CA$201.97. However, its P/E ratio of 31.1x is higher than industry averages, suggesting a richer valuation.

BigBear.ai buys CargoSeer for AI trade security

BigBear.ai Holdings (BBAI) recently agreed to buy CargoSeer's AI software for cargo scanning and trade risk management. This acquisition follows other company activities like a partnership with Kraft Group. On January 23, 2026, BigBear.ai shares traded at US$5.93, showing a 40.52% return over one year. However, its price-to-sales ratio of 18x is much higher than its estimated fair value of 2.4x, indicating the stock is overvalued.

Elastic launches new AI automation tools

Elastic (ESTC) released its new Agent Builder and introduced Workflows in tech preview on January 23, 2026. The company also upgraded Elastic Cloud Serverless on AWS, highlighting its focus on AI and automation. Elastic's shares traded at US$71.80, showing a 3.28% gain for the day but a 31.02% decline over the past year. Despite recent declines, the stock is considered undervalued by some, with a fair value estimate of $104.54.

UiPath stock rises as AI automation gains interest

UiPath (PATH) saw its stock rise on January 23, 2026, reaching US$15.15, as easing geopolitical tensions boosted interest in automation and AI companies. The company's shares gained 6.69% in one day, though they experienced declines over the past 30 and 90 days. Despite this, UiPath has a positive 1-year and 3-year return. Analysts believe the stock is undervalued, with a fair value estimated at $21.54, driven by strong demand for its AI-powered automation platform.

Two top AI software stocks to buy now

Software stocks have underperformed the S&P 500, creating a rare buying chance due to AI fears. Morgan Stanley analysts believe AI will boost developer productivity and app modernization. AppLovin (NASDAQ: APP) uses its AI platform, Axon, to improve advertising campaigns, outperforming competitors like Meta Platforms. Analysts see a 45% upside for AppLovin, with a median target price of $774.50. Atlassian (NASDAQ: TEAM) offers AI-powered software for team collaboration and project management, with analysts expecting an 84% upside and a median target price of $225.

Two top AI software stocks to buy now

Software stocks have underperformed the S&P 500, creating a rare buying chance due to AI fears. Morgan Stanley analysts believe AI will boost developer productivity and app modernization. AppLovin (NASDAQ: APP) uses its AI platform, Axon, to improve advertising campaigns, outperforming competitors like Meta Platforms. Analysts see a 45% upside for AppLovin, with a median target price of $774.50. Atlassian (NASDAQ: TEAM) offers AI-powered software for team collaboration and project management, with analysts expecting an 84% upside and a median target price of $225.

Big Tech invests billions in AI infrastructure

Big Tech companies plan to invest $530 billion in AI infrastructure in 2026, raising questions about how these investments will lead to profits. While AI chip suppliers like AMD and Micron have seen strong returns, Big Tech is expected to monetize its AI efforts soon. Microsoft ($MSFT) shows strong performance, with Q3 2025 revenue growing 18.4% to $77.67 billion. Its Azure cloud service saw 40% growth in Q3, with AI services contributing significantly to this acceleration.

Three ETFs to profit from generative AI growth

The generative AI market is expected to grow from $71.4 billion in 2025 to $890.6 billion by 2032, offering significant investment opportunities. Three ETFs provide diversified exposure to this sector. The VanEck Semiconductor ETF (SMH) tracks 25 semiconductor companies, including Nvidia and Taiwan Semiconductor. The State Street SPDR S&P Semiconductor ETF (XSD) offers an equal-weight exposure to 43 semiconductor firms. The iShares Semiconductor ETF (SOXX) focuses on 31 US semiconductor companies, with top holdings like Nvidia and Advanced Micro Devices.

Experts suggest investing in Japan stocks and AI

Wealth managers offer advice on investing $100,000 amid market volatility. Jack Ablin from Cresset Capital suggests investing half in Japanese stocks and half in the S&P 500 Value Index, citing Japan's economic reforms and low valuations. He also suggests investing in rare baseball cards like the 1952 Topps Mickey Mantle rookie card. Kim Forrest from Bokeh Capital Partners recommends a sector-neutral approach, focusing on well-run companies with growth at a reasonable price.

Software stocks offer buying chance despite AI fears

Despite investor concerns about AI, software stocks remain a good buying opportunity, according to analyst Dan Romanoff. He notes that software companies' fundamentals are strong, even as stock performance has lagged. Romanoff estimates that many software names are currently trading at about a 25% discount. He highlights Microsoft, praising its strong Azure growth driven by AI, and ServiceNow, which he sees as a leader in AI monetization and an undervalued stock with a fair value of $1,060 per share.

Kevin Simpson buys two AI adjacent stocks

Investor Kevin Simpson, CEO of Capital Wealth Planning, bought two non-tech stocks he believes will benefit from the AI buildout. He purchased Eagle Materials, a company that makes construction materials like concrete, which is essential for building new data centers. Simpson also invested in TopBuild, a company specializing in insulation for buildings. He sees these material and insulation suppliers as major beneficiaries of the extensive construction needed for AI infrastructure in the coming years.

China AI stocks with strong apps gain favor

China's AI boom is shifting investor focus to companies with successful applications that show strong earnings. Alibaba Health and Kuaishou are gaining investor favor, with their earnings estimates rising. Gary Tan of Allspring Global Investments expects AI-driven productivity to boost earnings in internet, healthcare, and software. Analysts like John Yung from Citigroup see Alibaba Health benefiting from increased online drug sales, while Thomas Chong from Jefferies notes Kuaishou's Kling model is boosting sales. These companies offer attractive valuations in China's growing consumer technology sector.

Stifel raises SiTime target on edge AI growth

Stifel analyst Josh Buchalter raised his price target for SiTime (SITM) to $400 from $360 on January 16, keeping a Buy rating. Buchalter updated his view on analog and processor companies, noting a renewed interest in analog components. He believes that edge AI will become a significant factor for SiTime's earnings in 2026. SiTime Corporation is considered one of the best mid-cap growth stocks to buy right now.

Nvidia invests 2 billion in Synopsys AI chip design

Nvidia announced a multi-year partnership with Synopsys (NasdaqGS:SNPS) on January 23, 2026, including a US$2 billion investment. This collaboration focuses on AI-driven chip design and advanced semiconductor workflows, placing Synopsys at the heart of AI hardware development. Synopsys provides essential software and intellectual property for designing complex chips. However, recent insider stock sales and an analyst downgrade raise questions about the company's risk and reward balance, especially concerning its IP business.

Sources

• A Look At StepStone Group (STEP) Valuation After New AI Investment And Senior Housing Vehicle
• Thomson Reuters (TSX:TRI) Valuation Check As New AI Tax Tool Gains Traction
• BigBear.ai (BBAI) Valuation Check After CargoSeer Acquisition And AI Trade Security Push
• Assessing Elastic's Valuation As New AI Agent Builder And Automation Tools Roll Out
• UiPath (PATH) Valuation Check After Geopolitical Easing Lifts Automation And AI Stocks
• A Once-in-a-Decade Investment Opportunity: The 2 Best AI Stocks to Buy Now
• A Once-in-a-Decade Investment Opportunity: The 2 Best AI Stocks to Buy Now
• The $530 Billion AI Question: Which Big Tech Stock is Winning?
• Can Generative AI Drive These 3 ETFs to 43% Gains This Year?
• Where To Invest $100,000: Japan Stocks, AI, Baseball Cards
• Beaten-Down Software Stocks Are Still Good Buys, Despite Investors’ AI Fears
• Two stocks investor Kevin Simpson snapped up amid the volatility that stand to benefit from the AI buildout
• China’s AI Stocks With Killer Apps are Winning Investor Favor
• Stifel raises SiTime (SITM) PT as edge AI becomes a reality for 2026 earnings
• Nvidia Deal Puts Synopsys At AI Center As Insider Signals Diverge