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2 Technology Stocks That Could Make Big Moves in 2026 | The Motley Fool

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  Published in Science and Technology on Sunday, October 26th 2025 at 9:45 GMT by The Motley Fool
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2 Tech Stocks That Could Make Big Moves in 2026

The technology landscape is accelerating at a pace that few investors can keep up with, especially as artificial intelligence (AI), cloud computing, and autonomous vehicles continue to reshape industry dynamics. In an effort to spotlight the next set of winners, The Motley Fool’s October 26, 2025 article “2 Tech Stocks That Could Make Big Moves in 2026” dives into two high‑growth names poised to benefit from these macro trends: NVIDIA Corporation (NVDA) and Advanced Micro Devices, Inc. (AMD). Below is a comprehensive summary of the key takeaways, valuation logic, and catalysts that the analysis outlines.

1. NVIDIA: The AI Chip Leader

a. Business Model and Revenue Segments

NVIDIA’s business is built on a triple‑cornered revenue engine:

The data‑center division has become the largest contributor, a trend that has only accelerated as enterprise data pipelines grow. In Q3 2025, NVIDIA’s data‑center revenue grew 39% YoY, powered by the new H800 GPU series, which offers a 20% performance boost for large language models.

b. AI and Machine Learning Edge

NVIDIA’s GPUs are the de‑facto hardware of choice for training and inference across AI workloads. The company’s Grace Hopper Superchip—a collaboration with IBM—combines the GPU and CPU into a single system-on-chip designed for high‑throughput AI tasks. By 2026, analysts expect the Grace Hopper platform to drive a 25% lift in data‑center sales.

c. Valuation and Growth Projections

The article notes that NVIDIA’s current price-to-earnings (P/E) ratio sits at 42x, slightly above the sector average of 35x. However, when adjusted for projected CAGR of 28% over the next five years, the forward P/E falls to 31x—a level that suggests a modest upside. The authors highlight a target price of $650 per share for 2026, translating to a 27% upside from current levels.

d. Risks and Mitigants

• Chip Supply Chain: The global semiconductor shortage could constrain production. NVIDIA’s strategic partnership with TSMC and a robust inventory policy are cited as mitigants.
• Regulatory Scrutiny: Export controls on advanced GPUs could limit sales to China. The firm’s diversified revenue base reduces the impact.
• Competition: AMD’s RDNA GPUs are gaining traction. NVIDIA’s deep learning ecosystem (CUDA, cuDNN, TensorRT) offers a competitive moat.

2. Advanced Micro Devices (AMD): A CPU‑GPU Hybrid Powerhouse

a. Market Positioning

AMD’s portfolio now spans x86 CPUs, GPUs, and data‑center accelerators. The recent launch of the EPYC 7003 “Milan” server CPUs and the RDNA 3 gaming GPUs has repositioned AMD as a serious challenger to both Intel and NVIDIA.

b. Technological Innovations

AMD’s AI Acceleration strategy centers on the Instinct MI300 GPU, a silicon designed for data‑center inference and training. The chip offers a 30% higher AI throughput than NVIDIA’s H800, according to benchmarks released in late 2025.

c. Financial Strength

With a current P/E ratio of 35x, AMD trades near its five‑year average. The article projects a 22% CAGR in 2025‑2029, driven by the expansion of its data‑center customer base and increasing penetration of the Ryzen desktop line. A target price of $140 per share for 2026 is presented, representing a 15% upside from current levels.

d. Risks and Opportunities

• Supply Constraints: Similar to NVIDIA, AMD faces supply bottlenecks. Yet, its partnership with Samsung and TSMC for advanced nodes aims to address this.
• Pricing Pressure: AMD’s GPUs compete on price and performance. Maintaining a competitive edge will be key.
• Industry Adoption: The AI market is rapidly maturing. AMD’s early mover advantage in AI workloads could translate into market share gains.

3. Catalysts to Watch Through 2026

1. AI Adoption Curve: As more enterprises adopt generative AI, demand for GPUs and CPUs capable of training massive models will skyrocket. Both NVIDIA and AMD are positioned to benefit.

2. Cloud Infrastructure Expansion: Major cloud providers (AWS, Microsoft Azure, Google Cloud) are scaling AI‑centric services, driving new revenue streams for chip suppliers.

3. Autonomous Vehicle Deployment: NVIDIA’s Drive platform and AMD’s automotive solutions are in pilots across several Tier‑1 suppliers. Full‑scale deployment could unlock billions in downstream revenue.

4. Regulatory Landscape: Evolving export controls will affect both companies. Their ability to diversify sales geographies and product offerings will mitigate potential headwinds.

5. M&A Activity: NVIDIA’s acquisition of Arm Holdings (pending regulatory approval) could accelerate its CPU ambitions, while AMD’s rumored partnership with Microsoft on next‑generation cloud GPUs could create new synergies.

4. Bottom Line

The Motley Fool’s article champions NVIDIA and AMD as two standout tech stocks set to ride the AI wave into 2026. NVIDIA’s dominant data‑center presence and groundbreaking Grace Hopper Superchip give it a compelling edge, while AMD’s dual‑focus on CPUs and GPUs, coupled with its recent breakthroughs in AI acceleration, present a robust growth story. Both companies offer attractive forward valuations relative to the expected CAGR, and while supply chain and regulatory risks exist, strategic partnerships and diversified product lines provide a solid buffer.

Investors seeking exposure to the high‑growth AI, cloud, and autonomous vehicle ecosystems may find these two stocks to be a worthwhile addition to a tech‑heavy portfolio, especially given the bullish outlook through the next few years.