There's been some choppy activity in the stock market in October as the intensifying trade war between the U.S. and China has rattled investors. But the outlook for growth in the technology sector remains favorable, and that has created buying opportunities.
It's all about artificial intelligence (AI). Spending on AI infrastructure is booming, which could position chip designer Advanced Micro Devices (AMD +7.62%) for a big year in 2026. Another unexpected beneficiary of the AI trend is Unity Software (U +2.76%), which could see accelerating revenue next year, fueled by its AI-powered advertising product. Here's why these stocks could have room to run.
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1. Advanced Micro Devices
AMD offers a diversified portfolio of chips for data centers, video game consoles, PCs, and AI workloads. The stock is up 90% in 2025 so far.
The company is well positioned to capture more growth from the data center market. Several leading AI companies, including Microsoft and Tesla, are using its chips, and CEO Lisa Su recently called AI "the most transformative technology in the last 50 years."
NASDAQ: AMD
Key Data Points
AMD's central processing units (CPUs) for servers have gained market share over the last seven years from Intel, and management expects its share of that niche to continue growing. AMD's product roadmap, including its new Instinct graphics processing units (GPUs) for data centers, should fuel accelerating growth in 2026 and push the stock to new highs. Analysts currently expect AMD's earnings to soar by 59% next year.
2. Unity Software
About 70% of the top mobile games on the market today were built using Unity Software's game design engine. While it has had success expanding the market for its 3D software tools beyond the video game industry, its dominance in that space looks like the key catalyst for the stock heading into 2026.
NYSE: U
Key Data Points
The stock has started to recover from the sell-off that took place over the past few years due to weak financial results. With new leadership at the helm, the business is leveraging the advantage provided by its trove of valuable user data. This is leading to an attractive opportunity connected to its new AI-powered advertising tool, Unity Vector, which can help mobile game creators make more money. Unity Vector has already led to a 15% to 20% improvement in user acquisition, but the best is yet to come.
Management expects the investment they have put into Unity Vector's AI engine to have a notable impact on its business results next year. After reporting flat revenue performance over the past year, analysts expect Unity to return to double-digit percentage growth in 2026.
