With a little over two months left in the year and the major indexes hovering around all-time highs, many investors may be feeling uneasy about stock market valuations and how long the artificial intelligence (AI)-fueled rally can last. Whereas others may view AI as a game-changer that will boost productivity, earnings growth, and investment returns over the long run.
Regardless of where you stand, it's a mistake to overhaul your investment strategy based on emotion. A better approach is to be selective by targeting companies you believe are worth their valuation, even if there's an economic downturn, a slowdown in AI spending, or any other factor that could throw a wrench in near-term guidance.
Here are five growth stocks I'm particularly excited about for 2026.
Image source: Nvidia.
Betting big on AI
With many AI stocks trading at premium valuations, investors need to ensure that they aren't just betting on one aspect of the AI value chain. Nvidia (NVDA -0.31%), Oracle (ORCL -4.95%), and ASML (ASML 1.27%) are three completely different companies with multi-year growth potential from AI.
Nvidia
Up over 34% year-to-date, Nvidia is on track to beat the S&P 500 (^GSPC 1.07%) this year, even after surging over 800% between the start of 2023 and the end of 2024. And yet, it still isn't overvalued because it continues to grow earnings at a breakneck pace.
Nvidia's advanced graphics processing units (GPUs) and associated software are especially good at handling complex AI workloads. As long as hyperscalers keep pouring capital expenditures into data center buildouts, Nvidia's earnings should show no signs of slowing down.
Oracle
One of those high-growth hyperscalers is Oracle. Oracle Cloud Infrastructure is a distant fourth in market share behind Amazon Web Services, Microsoft Azure, and Alphabet-owned Google Cloud. However, I could see Oracle becoming the top cloud for AI by 2031.
Granted, this forecast is contingent on OpenAI's 10-gigawatt data center build moving forward on schedule. But outside of OpenAI, Oracle is still incredibly well-positioned to take market share from the industry veterans because its centers are purpose-built for AI rather than general computing.
Oracle is by far the riskiest stock on this list, but it could be worth a closer look for folks interested in a truly groundbreaking multi-year investment idea.
ASML
ASML is arguably the simplest way to bet big on AI. The company makes photolithography equipment for semiconductor manufacturing. Photolithography is the most crucial step of chip production because it involves printing designs on silicon wafers.
ASML has a monopoly on ultra-advanced machines called extreme ultraviolet (EUV) systems that reflect light to achieve short wavelengths. These machines are essential for printing small features and packing more transistors per chip, which is needed for parallel compute units like GPUs made by Nvidia.
In short, ASML is a catch-all way to invest in the growing demand for AI chip production.
A contrarian tech stock
AI is challenging the software-as-a-service business model for companies like Adobe (ADBE 3.07%).
Adobe relies on subscriptions billed monthly or annually, depending on the number of users. But if users can do more with less, then companies may need fewer subscriptions. Or if a rival AI-powered tool can replicate some of the functions of Adobe's Creative Cloud suite for a fraction of the cost, that could erode Adobe's once seemingly impenetrable moat.
Despite these risks, Adobe's discounted valuation is simply too cheap to ignore. The stock is down 26% year to date and has fallen 34.5% over the last five years -- a period in which the S&P 500 is up 90%. Adobe is trading at just 20.5 times earnings and 15.2 times free cash flow compared a five-year median price-to-earnings ratio of 43.6.
While Nvidia, Oracle, and ASML all fetch premium valuations for their multi-year growth potential, Adobe is valued as if its best days are behind it. I think it's a mistake to count out Adobe. The stock could be an especially good buy for investors looking for tech stocks at a good value for 2026.
Netflix's recession-resistance makes it worth a premium valuation
Branching outside of tech is communications giant Netflix (NFLX 3.36%). Like Nvidia and Oracle, Netflix is one of the "Ten Titans," a group of growth stocks that make up a staggering 39% of the S&P 500.
Netflix has an expensive valuation, but it is one of the highest-quality companies on the market. Consumers are pulling back on discretionary spending due to inflationary pressures and a higher cost of living. So one might think that Netflix could lose some subscribers, or at least some of its pricing power. But that's hardly been the case, as Netflix continues to grow its cash flows at a breakneck pace thanks to higher revenue and expanding margins.
It's easy for a company to do well when the operating environment is favorable. But it's the companies that can deliver even amid challenges that are worth buying and holding over the long term.
Netflix's record results are a litmus test for growth investors. They show that consumers are prioritizing their Netflix subscriptions over alternative entertainment options, which is a testament to Netflix's value. It's also a sign that the service is resistant to recessions, which is appealing for investors who feel uneasy about what the economy or stock market will do in 2026.
