Top technology companies that are meeting the demand for chips and other artificial intelligence compute requirements have delivered excellent returns to investors over the past few years.
Leading data center operators are estimated to spend more than $500 billion on capital expenditures in 2026, according to Goldman Sachs. However, over the long term, this spending could increase substantially. Research from McKinsey shows that data centers may require $7 trillion to meet demand for compute power by 2030.
This is very bullish for Advanced Micro Devices (AMD 3.13%) and Hut 8 (HUT 5.48%). Here's why these stocks are poised to reach new highs in 2026, with more gains coming in the years ahead.
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Advanced Micro Devices
Advanced Micro Devices (AMD) had a breakout year in 2025. The stock climbed 77%, with a significant portion of those gains following a deal with OpenAI in October. AMD is poised for another big year in 2026.
It enters the new year with strong growth across its business, including data center, gaming, and consumer processors. Revenue grew 36% year over year in the third quarter, while adjusted net income increased 31%.
NASDAQ: AMD
Key Data Points
Several catalysts are expected to set the stage for new highs in 2026. Oracle is set to roll out 50,000 AMD Instinct MI450 graphics processing units (GPUs) starting in the third quarter. This will include AMD's latest Helios rack system, which features multiple chips and networking products that are expected to benefit AMD's profitability.
AMD will also begin to supply its MI450 chips to OpenAI in the second half of 2026. This deal makes AMD a core supplier for the ChatGPT maker. AMD expects this agreement to generate a cumulative $100 billion in revenue over the next several years.
AMD has an extensive roadmap of products to support its long-term growth, with plans to launch its MI500 GPU for data centers in 2027, targeting a $1 trillion market for AI chips.
The company's long-term outlook anticipates 35% compound annual growth in revenue, with adjusted earnings per share expected to exceed $20. It believes it can hit these targets within the next three to five years. The earnings estimate suggests that the stock, currently trading at just over $200 per share, is conservatively valued at approximately 11 times the long-term target. Investors who buy shares today are looking at stellar return prospects.
Image source: Getty Images.
Hut 8
The need for AI infrastructure, including more data center capacity, is growing faster than the economy. In fact, Morgan Stanley forecasts a 47-gigawatt shortfall in available power for data centers in the coming years. This could put significant strain on the U.S. power grid and drive up the value of available data center capacity, notably from Bitcoin miners like Hut 8.
In December, Hut 8 signed a 15-year, $7 billion deal with Anthropic, a leading AI lab, to supply 245 megawatts of data center capacity at its River Bend campus in Louisiana. This deal will eventually scale up to nearly 2.3 gigawatts of available power. If certain contingencies are met, the deal's value can increase to up to $17.7 billion.
This deal highlights the growing value of watts for data centers, and why Hut 8 shares are so attractive. The stock currently has a market capitalization of $6.6 billion at the time of writing, which appears relatively inexpensive compared to the value of the Anthropic deal.
NASDAQ: HUT
Key Data Points
The prospect of more deals further bolsters the stock's value. As of the third quarter, Hut 8 has a long-term development pipeline of up to 8.6 gigawatts of data center capacity. The risks involve financing these projects without overburdening the company with debt, while also staying on schedule with data center construction.
However, Hut 8 has a solid balance sheet. It ended the third quarter with 13,696 Bitcoins in reserve from its mining operations, which were worth about $1.6 billion, far outweighing its $387 million in debt.
The company also has financing partnerships with top institutions, including JPMorgan and Goldman Sachs. This validates Hut 8's strategy and ability to execute toward its goals.
Hut 8's revenue increased 91% year-over-year in the third quarter to $83 million, primarily driven by its Bitcoin mining operations. It has a solid business model that supports investing in AI data centers, while offsetting some of the costs with revenue from Bitcoin mining.
The stock has more than doubled in value over the past year, with further gains expected for investors. Analysts anticipate the company's revenue will nearly double to $429 million this year, which is just a stepping stone to further growth in the coming years.
