Few trends have had as big an impact on the stock market over the last couple of decades as artificial intelligence (AI). It has the potential to enhance productivity across various industries, ultimately leading to increased profits for shareholders.
In the near term, there have been only a handful of big winners, but that hasn't prevented investors from bidding up the share prices of companies that could benefit from AI well in the future.
As a result, many AI stocks look overpriced and risky today. Investors must be willing to delve into the details to determine whether a company is worth buying and holding. But good long-term values still exist among AI stocks.
Here are three potentially unstoppable artificial intelligence stocks to buy for 2026.
Image source: Getty Images.
1. Figma
Figma (FIG 4.67%) provides cloud-based design software focused on creating user interfaces and improving user experience development. The company has been making a big push to integrate AI into its products, with CEO Dylan Field saying, " ... the first prompt is just a creative starting point, not the final destination." AI is an enhancement to Figma's software, not a replacement.
The company released Figma Make in July, just ahead of its initial public offering. It enables users to rapidly generate design prototypes with natural language prompts. It has seen strong adoption so far, especially among its largest customers.
The company also acquired AI image and video generation company Weavy, which it will integrate into a new product, Figma Weavy, to provide images and videos for use in mock-ups.
NYSE: FIG
Key Data Points
Management continues to expand its product line and features, leading to very high net revenue retention. Last quarter, Figma's existing customers spent approximately 31% more on its services than they did during the same period the previous year. This indicates a strong competitive moat, as the company's software offers advanced features while benefiting from significant switching costs. That said, the introduction and uptake of AI-powered tools have hurt its gross margin, which fell to 86% in the third quarter, down from 92% a year ago.
Figma's market cap of $18.3 billion is notably lower than the $20 billion it had in 2022 when Adobe attempted to acquire the business. That deal was blocked by regulators due to antitrust concerns, but it provides a good baseline on the value of the business.
While new competition from Adobe could eat into Figma's growth, the company has proved to be resilient and remains innovative. Its enterprise value of $17.1 billion is about 13 times analysts' revenue expectations for 2026. That's a fair price to pay for a company with strong growth and an excellent competitive moat.
2. Alibaba
Alibaba Group (BABA 1.70%) may be best known for its huge Chinese e-commerce business, but it's also the biggest cloud provider in China. And it's investing in its own foundational large language model, which it provides to developers looking to build new AI software.
The company's e-commerce business is under pressure. ByteDance's Douyin, the Chinese version of TikTok, has carved out a substantial market share with its social commerce platform. And PDD Holdings' Temu is taking share from Alibaba's AliExpress, which specializes in exporting to customers outside China.
Alibaba is fighting back by investing in what it calls "quick commerce," which aims to deliver items within hours instead of days. The investment has been a drag on profitability, but it's showing promise with rapid growth and improving unit economics.
NYSE: BABA
Key Data Points
Management is piling the cash flow from the retail business into cloud computing and AI. It has deployed about 120 billion yuan ($17.2 billion) in capital expenditures over the last 12 months for AI and cloud infrastructure. That's paid off with accelerating revenue growth, up 34% year over year last quarter. AI-related revenue is growing by triple digits, driven by the accelerating adoption of AI products.
Investors examining Alibaba's recent earnings may view the company as a slow-growing business with declining profitability, but this would overlook the long-term potential of the business. Alibaba can maintain its market share of e-commerce in China, and its profitability will quickly recover as it scales up its rapid delivery operations.
Meanwhile, it's seeing very fast and strong growth from its cloud computing segment, which still has plenty of operating leverage as it works to add capacity as quickly as possible. With a ratio of enterprise value to forward earnings before interest, taxes, depreciation, and amortization (EBITDA) of less than 17, the stock looks like a great value right now.
3. Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (TSM 4.37%), also known as TSMC, is the world's largest contract chip manufacturer. It commanded 71% of all spending on third-party semiconductor foundries in the third quarter.
That huge market share stems from its advanced technology. If a company wants to build one of the most advanced chips in the world, it's going to work with TSMC. Not only can it provide the technology, but it can also offer it at a better price than its competitors.
That's in part due to its capabilities to produce better yields of viable chips per silicon wafer and in part because of its scale. As a result, TSMC benefits from a virtuous cycle where it wins big customer contracts, invests more in research and development along with equipment to advance its capabilities, and then wins even more big contracts.
NYSE: TSM
Key Data Points
The company has benefited greatly from the ramp-up in spending on artificial intelligence, but AI chips remain only a small portion of its total business. That said, the technology could be the driving force behind its growth over the next few years, as management expects AI-related revenue to grow at a mid 40% annualized rate from 2025 through 2029. It outpaced that level through the first three quarters of 2025 (as expected), but C.C. Wei, the company's CEO, said during the third-quarter earnings call "the numbers are insane."
Management's forecast of 20% overall annualized revenue growth through 2029 seems reasonable. And it should be able to support stable gross margins even as it introduces new technology, since it's charging 10% to 20% more for new 2nm chip wafers while increasing the price of its older technology as well.
It should be able to produce strong operating leverage over time, leading to bottom-line growth above that 20% rate. That makes TSMC stock, with its forward price-to-earnings ratio of 25, very attractive right now.
