AI Stocks: Speculative Hype or Disciplined Growth?

Although many AI stocks finished 2025 on a sour note, 2026 is starting the opposite way. Several bullish signals are appearing for AI stocks, including:AI Valuations Are ReasonableNumerous leading AI stocks, such as Nvidia (NVDA) have been consolidating for several months. Nvidia shares peaked in October (as of now) and have moved sideways. However, the company’s fundamentals have only become stronger. The result? Nvidia’s valuation metrics, such as its price-to-sales ratio have retreated dramatically, making the stock attractive to a wider swath of Wall Street institutions, including those that focus on valuations. NVDA, which had a P/S of 200x in 2023, now has a P/S of just ~24x.Image Source: Zacks Investment ResearchTaiwan Semi: A Good Barometer of the AI Industry Taiwan Semiconductor (TSM) is arguably the most important AI barometer in the market. The company is a pure-play manufacturer who supplies parts that are indispensable to companies like Advanced Micro Devices (AMD) and Nvidia. Thursday, TSM shares rallied on news that the company beat earnings and raised forward guidance. Most notably, TSM’s management team made a point of dispelling AI bubble fears. Zacks Consensus Estimates suggest double-digit EPS growth in 2026.Image Source: Zacks Investment ResearchGoogle Search Cannibalization Fears are UnfoundedSeveral Wall Street analysts expressed concerns that Alphabet’s (GOOGL) AI business could eat into its dominant, lucrative search business. However, the data shows that not only has Google’s ‘Gemini’ search integration not negatively impacted its search business, it’s strengthened it.Deregulation will Spur AI growthPresident Trump has issued numerous executive orders that reduce regulatory red tape. AI companies will benefit dramatically from the administration’s focus on procuring innovation and reducing stringent oversight.Price and Volume Action Provides CluesOn Thursday, several AI stocks moved higher on heavy volume turnover. For instance, CoreWeave (CRWV) gained nearly 10% on Thursday as volume turnover surged. Heavy volume on strong green days is a hallmark of accumulation.Bottom LineThe narrative surrounding artificial intelligence is shifting from speculative hype to disciplined growth. Reasonable valuations, robust earnings, and a supportive regulatory landscape suggest AI stocks have room to run.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report CoreWeave Inc. (CRWV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks