These two stocks will be the biggest winners from the $500 billion in AI spending in 2026

Investments in AI and data centers continue to grow.
Nvidia remains the dominant AI chip company, with its new Rubin architecture just around the corner.
TSMC has been busy building AI chips and is gearing up for further growth.
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It’s been just over three years since artificial intelligence (AI) became the hottest topic on Wall Street. Nothing lasts forever, but it’s hard to imagine the AI boom ending this year. At least, not while billions of dollars continue to flow into data centers, chips and other AI infrastructure.

So how is the AI space shaping up for 2026? Consensus estimates from Goldman Sachs indicates that AI companies could spend more than $500 billion in capital expenditures this year. That would mean an increase of more than $100 billion over 2025.

In other words, the AI train is going faster than ever. Which stocks will benefit the most from all this AI spending? Recent developments point to some familiar faces.

Here’s why I’m predicting this Nvidia (NASDAQ: NVDA) and Taiwan Semiconductor Manufacturing (NYSE: TSM) will be the big AI winners this year.

Image source: Nvidia.

Nvidia has grown by leaps and bounds over the past few years. Its GPU chips are the hardware of choice for hyperscalar AI, using Nvidia’s CUDA programming to build massive data centers where thousands of GPU chips work together as clusters to train and operate AI models.

The company’s GPU Hopper architecture helped it capture the AI data center market early. Since then, Nvidia’s customers have largely stuck with its GPUs, which have a reported 85% to 90% market share. That’s why Nvidia’s revenue has grown 1,000% over the past five years, and the stock has performed similarly.

So why is Nvidia still a big winner this year? AI companies have already laid the groundwork, mostly relying on Nvidia hardware. It’s hard to see that changing dramatically while the investment boom still has so much momentum. Nvidia’s next-generation Rubin architecture recently went into full production, and the company has a $500 billion backlog that stretches through 2026.

This should set the stage for continued growth at Nvidia. The stock’s current price-to-earnings ratio of 45 still offers excellent value, especially given analysts’ estimates of 36% annualized long-term earnings growth. Unless the AI boom falls overnight, Nvidia is likely to continue its winning ways this year.

Investors can follow the AI chip crumbs to the next winner. Nvidia and most other chip companies don’t actually make anything. Instead, they outsource production to foundries. Taiwan Semiconductor Manufacturing, also known as TSMC, is the largest foundry in the world, with an estimated 72% market share. Its next closest competitor controls just 7% of the market.

TSMC’s dominance comes from some serious competitive advantages. It has advanced manufacturing techniques and larger factory capacity, making it difficult for other foundries to compete with TSMC, especially in the high-end chips used in AI data centers. TSMC’s market share has gradually increased in recent years as the AI chip market has exploded.

The company recently posted an excellent earnings report and is raising capital spending to $52 billion-$56 billion in 2026, up from $41 billion in 2025. It’s a strong signal that TSMC sees more growth on the horizon, as global demand for AI chips is mostly concentrated through its fabs. Analysts now see the company growing revenue by nearly 30% annually over the next three to five years.

TSMC was a red-hot stock last year, rising more than 53%. However, it seems investors still don’t appreciate TSMC’s growth enough. The stock is currently trading at a price-to-earnings ratio of 30, which frankly is a compelling valuation for a dominant business with such bright growth prospects. If investors continue to appreciate TSMC’s strong performance, the stock is likely to continue to perform strongly throughout 2026.

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Prediction: These 2 stocks will be the biggest winners from the $500 billion in AI spending in 2026 was originally published by The Motley Fool

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