Artificial intelligence (AI) remains one of the best opportunities for investors in 2026. Key suppliers of hardware and data center infrastructure are seeing strong demand heading into the new year, which sets the stage for more gains for investors.
Here are two stocks with significant long-term return potential that are worth buying now.
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1. Advanced Micro Devices
Shares of Advanced Micro Devices (AMD 0.67%) have returned 8,300% over the last 10 years, and this amazing growth story is far from over. The company is a leading supplier of chips for several markets but is particularly well positioned to see growth in its data center business.
AMD's focus on meeting demand for AI workloads is paying off. Revenue grew 36% year over year in the third quarter. This growth was driven by record sales of its EPYC central processing units (CPUs) for servers, as well as demand for Ryzen desktop processors and Instinct data center chips.
NASDAQ: AMD
Key Data Points
While AMD is second to Nvidia in graphics processing units (GPUs), demand for AMD's Instinct GPUs has been accelerating. Its data center segment revenue grew 22% year over year, reaching a quarterly record of $4.3 billion. This trend is expected to accelerate further in 2026, as OpenAI recently struck a deal with AMD to supply a substantial number of Instinct GPUs, starting in the second half of 2026.
However, management also sees many customers planning to deploy larger CPU clusters in the near term. This highlights two key engines of growth in CPUs and GPUs, which will drive AMD's business going forward.
The demand trends are validating AMD's full-stack strategy, which combines chips, software, and system-level solutions. Management sees a $500 billion addressable market opportunity for its products. This provides ample upside for investors who buy the stock on the recent dip, allowing them to earn attractive returns over the next five years and beyond.
If the stock continues to trade at the same price-to-earnings multiple, which is not overly expensive at 32 times 2026 estimates, investors could be looking at truly wealth-building gains. Analysts are projecting the company's earnings to grow at an annualized rate of 45% over the next few years.
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2. Iren
Investing in companies that supply data center capacity to hyperscalers is a compelling opportunity for investors. The demand for AI compute, including chips and data center infrastructure, is growing faster than the global energy supply.
This is leading to a major bottleneck in the coming years in available compute capacity, where a single data center requires hundreds of megawatts of power to run large quantities of GPUs. This is why you want to consider investing in Iren Limited (IREN +0.77%) right now.
Microsoft CEO Satya Nadella recently revealed that the company has large quantities of GPUs sitting around with no data centers to plug them into. Microsoft has a massive amount of data centers for its cloud business but needs more. This is why the company recently signed a $9.7 billion, five-year contract with Iren to supply data center capacity starting this year.
NASDAQ: IREN
Key Data Points
The Microsoft deal is for Iren's Childress site in Texas, which will provide 750 megawatts of energized data center capacity. However, Iren also has 1.4 gigawatts coming online at its Sweetwater data center site in April. This could lead to another major contract with a hyperscaler in the near term.
Iren's market capitalization has been fluctuating between about $12 billion to $15 billion recently. This is a fair price for its $2.8 billion in net assets and Microsoft contract value.
However, Iren has only just begun to scratch the surface of its potential. The company has roughly 3 gigawatts of grid-connected power for its data center pipeline, and that's only what it has disclosed.
Considering Iren has been investing in this opportunity for many years by securing land and power assets, management likely has a plan to scale to several gigawatts of energized data centers over the next decade. This will be enormously valuable, considering the severe strains on the U.S. power grid that are expected to result from increases in compute that are needed to train future AI models.
The stock surged 285% in 2025 but is likely headed much higher over the next five years. The consensus analyst estimate has the company's revenue increasing from $510 million in fiscal 2025 to more than $4 billion by fiscal 2030.
