The first quarter of 2026 has been tough for artificial intelligence (AI) stocks…or has it?
For one thing, the stock prices of some of the biggest AI companies, after years of explosive growth, are actually down so far this year. NVIDIA (NASDAQ: NVDA)For example, it is down almost 5% so far this year.
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But AI spending doesn’t appear to be slowing down… in fact, it’s expected to grow faster than ever. And some AI stocks are soaring to new heights. It’s as if the market can’t make up its mind.
Here’s how I interpret the mixed signals the AI stock market is sending and how I plan to get ahead.
If you just look at the AI hyperscalers (the biggest spenders on AI), you’ll see a similar story to Nvidia. All of their stock prices are down so far in 2026. Some are only down single digits: Google parent Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) has fallen only 2.5%, while Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) They have fallen by 6.9% and 7.5%, respectively. But Metaplatforms (NASDAQ: META) has fallen 12.9% so far this year, and microsoft (NASDAQ:MSFT) Shares are down 23%!
But if you look beyond the hyperscalers, you get a different picture. Many semiconductor stocks have risen by double-digit percentages even as semiconductor king Nvidia has lagged behind. Semiconductor manufacturing in Taiwan (NYSE: TSM) has increased 13.7% in the year. analog chip manufacturer Texas Instruments (NASDAQ: TXN) has risen 15.1%. And the company that makes most of the equipment used in high-end microchip manufacturing, ASML (NASDAQ: ASML)has risen 22.1%.
It doesn’t look like 2026 will punish the 2025 winners. Vertiv (NYSE: VRT)a company that makes power and cooling systems for data centers, has seen its shares soar 61.8% so far this year, following a 42.6% gain in 2025. Memory chip maker Micron technologies (NASDAQ:MU) is up 32.3% so far in 2026 after a massive 239.1% gain in 2025. Both comfortably outperformed the S&P 500Profitability of 16.4% in 2025.
So why does the market continue to shower some AI companies with love and kick others to the curb? This is what I think is happening.
Valuation doesn’t seem to be a concern. Of the stocks I listed, Micron has the lowest P/E ratio, while Vertiv has the highest, and both are outperforming the others. However, there appears to be a divide in the types of companies the market is rewarding right now.
