In this article, we will look at the 10 Best AI Stocks to Buy for 2026 According to Billionaire David Tepper.
US equity markets have powered to record highs amid renewed investor interest in AI trades, despite oil prices hitting $100 a barrel. The tech-heavy Nasdaq 100 has already recouped the more than 10% losses accrued following the eruption of the Iranian war and is now up by about 16% for the year.
The rally around tech and AI stocks comes as investors increasingly bet on continued rapid data center construction. The rally has come even as investors don’t expect significant returns from AI developers before the end of the decade. According to Morningstar analysts, artificial intelligence stocks offer the best value for investors while trading at the largest discount since 2019.
AI isn’t a bubble that’s going to burst anytime soon – the underlying fundamentals are robust. Demand for semiconductors is beating expectations and key drivers like data centers and infrastructure remain intact. The AI story has further to go, and investors should make the most of it while these opportunities still exist, said chief equity strategist Michael Field.
While there were concerns about lofty valuations in AI stocks early in the year, Morningstar research points out that market volatility has led to a significant decline from record highs. Consequently, there is more attractive pricing.
Billionaire David Tepper is also bullish on artificial intelligence stocks, having tripled his position in a company developing memory processors. Through his investment firm, Appaloosa Management, the billionaire investor has loaded up on stocks at the heart of the AI revolution. In addition, technology stocks account for about 45% of the hedge fund’s holdings.
Appaloosa Management achieved strong performance in 2025, with its private closed-end funds generating a 23% return for high-net-worth clients. Key drivers behind the strong performance included high conviction pivot toward AI-related hardware and memory stocks.
With that in mind, let’s take a look at some of the best AI stocks to buy for 2026, according to Billionaire David Tepper.
Our Methodology
To compile a list of the best AI stocks to buy for 2026, according to Billionaire David Tepper, we reviewed Q4 2025 13F filings of Appaloosa Management LP. From the portfolio, we focused on stocks with significant exposure to artificial intelligence technology. From the list, we also highlighted how many hedge funds held positions in these stocks during Q4 2025. Finally, we ranked the stocks based on the value of Appaloosa Management’s equity holdings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Best AI Stocks to Buy for 2026 According to Billionaire David Tepper
10. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 101
Appaloosa Management Equity Stake: $66.87 Million
ASML Holding NV (NASDAQ:ASML) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 5, together with six other technology companies headquartered in Europe, ASML Holding NV cosigned a piece calling for swift government action across Europe.
In the opinion piece, the technology companies urge governments across the region to create the conditions that will propel Europe to global technology leadership. According to ASML Holding NV and its partners, the region is losing its global competitiveness. Consequently, they are calling on governments to push for robust, market-driven sector policy support.
The remarks come on the heels of ASML Holding NV delivering first-quarter results that were within the guidance. Net sales totaled €8.8 billion, with gross margin at 53% and earnings per basic share at €7.15. The chief executive officer reiterated that the company is well-positioned to capitalize on the semiconductor industry’s growth outlook as it continues to solidify, driven by AI-related infrastructure investment. Demand for chips also continues to outpace supply.
ASML Holding N.V. is an enabler of the AI revolution, holding a near-monopoly on the advanced machinery required to produce the world’s most sophisticated AI chips. Its technology is essential for manufacturing the high-performance logic and memory chips needed for AI training, inference, and data centers.
9. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 132
Appaloosa Management Equity Stake: $69.60 Million
Advanced Micro Devices Inc. (NASDAQ:AMD) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 6, analysts at Goldman Sachs and Bernstein upgraded Advanced Micro Devices Inc. after the company delivered solid first-quarter results driven by accelerating demand for AI infrastructure.
Goldman upgraded the stock to a Buy and nearly doubled its price target to $450 from $240. The investment bank upgraded the stock, impressed by the tailwinds to the server CPU business around agentic AI. According to analyst James Schneider, AMD is staring at tremendous opportunities as agentic AI proliferates across enterprise and consumer workloads.
Bernstein also upgraded AMD to an Outperform from Market Perform and raised the price target to $525 from $265. The research firm expects AMD’s earnings to exceed $14 per share in 2027 and $20 per share by 2028. In the first quarter, the company delivered $10.25 billion in revenue and earnings of $1.37 above consensus estimates of $9.9 billion and $1.28, respectively.
Advanced Micro Devices Inc. provides comprehensive AI designed to accelerate AI training and inference. Its core AI strategy centers on high-performance Instinct MI-series GPUs for data centers, EPYC CPUs for enterprise workloads, and Ryzen processors with integrated neural processing units (NPUs) for AI-powered PCs.
8. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 147
Appaloosa Management Equity Stake: $151.16 Million
Uber Technologies Inc. (NYSE:UBER) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 7, analysts at Stifel reiterated a Buy rating on Uber Technologies Inc. and increased the price target to $102 from $94.
The price target hike follows the company’s solid first-quarter 2026 results, as it takes a capital-efficient approach to autonomous vehicles and embraces AI to drive growth and productivity. For the third consecutive quarter, gross bookings growth exceeded 21% with earnings scaling at more than twice the topline.
Uber is also benefiting from increasing customer engagement that continues to drive results and Gross Bookings per trip by 400 basis points in the recent quarter. The company is also gaining market share in US mobility, specifically in San Francisco and Los Angeles. It’s also enjoying robust growth in international delivery, with Australia Trips up 30% year over year.
Stifel remains bullish on Uber and raised the price target, buoyed by the company’s core platform outlook and growth initiatives, including autonomous vehicle rollouts, Eats, International expansion, and cross-product usage, which will continue to drive revenue growth.
Uber Technologies Inc. uses AI to enhance its marketplace efficiency and has expanded into providing AI data solutions for enterprise clients through its “Uber AI Solutions” division, offering services such as data labeling for AI model training. Uber also uses AI to optimize ride-hailing and food delivery, including route optimization and fraud detection, and integrates AI agents into its customer service.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 78
Appaloosa Management Equity Stake: $195.85 Million
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 7, QUALCOMM Incorporated unveiled two new Snapdragon mobile platforms to deliver advanced capabilities for next-generation smartphones.
Snapdragon 6 Gen 5 is one of the platforms that will deliver capabilities with new in-series AI-powered camera features, ultra-responsive performance, and improved power efficiency. On the other hand, the Snapdragon 4 Gen 5 offers essential connectivity and gaming features, backed by dependable, long-lasting battery life.
The two platforms are designed to enable next-generation capabilities for users seeking more from their smartphones, from AI-powered camera features to enhanced photo capture and image quality. In addition, the platforms affirm Qualcomm’s focus on delivering impactful solutions that can strike the right balance of performance, power efficiency, and connectivity. The platform is poised to power commercial devices from the second half of the year, including Honor, OPPO, realme, and REDMI.
Qualcomm focuses on on-device AI, designing high-performance, low-power AI engines and hardware for smartphones, laptops, vehicles, and IoT devices. Their technologies, such as the Qualcomm AI Engine and Hexagon NPU, enable AI to run locally rather than in the cloud, enhancing privacy and efficiency.
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 264
Appaloosa Management Equity Stake: $317.05 Million
NVIDIA Corporation (NASDAQ:NVDA) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 9, NVIDIA Corporation announced that its board has appointed Suzanne Nora Johnson to join as a director and audit committee member, effective July 13, 2026. The move expands the board from ten to eleven members and strengthens governance at the $5.14 trillion semiconductor giant, which holds an “EXCELLENT” financial health score. Johnson will receive restricted stock unit grants valued at $255,000, vesting semi‑annually over three years, along with a pro‑rated annual equity grant, with portions vesting in late 2026 and mid‑2027.
On May 8, Reuters reported that SoftBank has opened discussions with NVIDIA Corporation about the possibility of building made-in-Japan artificial intelligence servers.
The Japanese telecom giant has engaged Nvidia as part of an effort to build a production system that, by the end of the decade, will initially assemble components externally. The unit is to focus on high-performance servers capable of running advanced graphics processing units at high speeds.
On the other hand, Nvidia has inked a strategic partnership with IREN Limited to accelerate the deployment of next-generation AI infrastructure. The partnership is to support the deployment of 5 gigawatts of NVIDIA DSX-aligned AI infrastructure across IREN’s data center pipeline. The two are also to accelerate the deployment of NVIDIA-accelerated compute in DSX AI factories to expand access for AI-native startups and enterprise customers.
NVIDIA Corporation is the world leader in AI computing, functioning as the fundamental infrastructure provider for the artificial intelligence industry. The company provides a full-stack platform—comprising specialized hardware, software, and services—that powers everything from AI model training and data center operations to edge AI and robotics.
5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 224
Appaloosa Management Equity Stake: $343.39 Million
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 8, Taiwan Semiconductor Manufacturing Company Limited delivered April revenue figures that affirmed strong demand for artificial intelligence chips.
The company’s April revenue was up 17.5% year over year to $13.08 billion. Revenue for the first four months of the year was up by 29.9%. The robust revenue growth underscores the company’s increasingly prominent role in the global semiconductor supply chain as demand for AI infrastructure and advanced AI chips grows.
On the other hand, Taiwan Semiconductor Manufacturing has entered into a strategic collaboration with Sony Semiconductor Solutions Corporation. The companies are joining forces to enhance the development and manufacturing of next-generation image sensors. The companies are to establish a joint venture with Sony as the majority and controlling shareholder.
The joint venture is to leverage Sony’s expertise in sensor design alongside TSMC’s strengths in process technology and manufacturing to enhance image sensor performance.
Taiwan Semiconductor Manufacturing Company Limited dominates advanced AI chip manufacturing for clients such as Nvidia, AMD, and Apple, leveraging AI to optimize production. It controls over 90% of high-end chip production and supports scalable AI hardware with advanced packaging.
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 256
Appaloosa Management Equity Stake: $396.05 Million
Meta Platforms Inc. (NASDAQ:META) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 8, the New York Times reported that Meta Platforms Inc. is increasingly pushing its 78,000 workers to use artificial intelligence as it also prepares to lay off some of them.
The company has reportedly told its US employees it plans to make changes that would affect tens of thousands of them. As part of the initiative, Meta Platforms has already started tracking what employees type on their computers, how they move their mice, what they click, and what they see on their screens. The idea is to track employees’ data so that AI models can learn how people complete everyday tasks.
Meta’s Chief Executive Officer, Mark Zuckerberg, has reiterated that Meta’s future lies in artificial intelligence. The company has already begun cutting jobs to offset its AI spending, with plans to slash 10% of its workforce. Amid the proposed layoffs, some staff no longer view Meta Platforms as a place for a longer career.
Meta Platforms, Inc. has transitioned into a major AI-driven company, integrating artificial intelligence across its social media apps, advertising systems, and hardware devices while developing open-source AI models. The company is focused on building agentic AI, improving content recommendations, and advancing its open-source Llama model.
3. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 137
Appaloosa Management Equity Stake: $428.12 Million
Micron Technology Inc. (NASDAQ: MU) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 10, Micron Technology Inc. emerged as one of the forces behind the global semiconductor industry entering a melt-up phase. The industry has exploded to $3.8 trillion in market capitalization over the past six weeks, driven by significant gains in traditional CPU and memory chip players.
The gains are also supported by significant earnings growth amid strong demand for CPU and memory chips. Micron Technology is projected to generate $77 billion in operating profit this year, a significant improvement from its 2023 losses. The bounce back to profitability comes amid demand for memory chips outstripping supply.
While Micron has rallied by over 100% year to date, some analysts believe its valuation remains grounded by the unprecedented growth. Micron stock trades at 8.9 times projected earnings, well below the 21 times the S&P 500 trades at.
Micron Technology, Inc. accelerates AI by providing the critical high-bandwidth memory (HBM), DRAM, and NAND storage required for data-intensive AI training and inference in data centers and edge devices. They supply crucial hardware to Nvidia for GPU systems and use AI to optimize their own semiconductor manufacturing processes.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 288
Appaloosa Management Equity Stake: $560.74 Million
Alphabet Inc. (NASDAQ:GOOGL) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 5, Reuters reported that Alphabet Inc. is on the cusp of replacing Nvidia as the world’s most valuable company by market capitalization.
The company has seen its market cap increase significantly on the back of increased investor interest impressed by its artificial intelligence efforts and booming cloud business. It has also emerged as one of the major AI service providers with its cloud platform. It is also taking Nvidia head-on with its custom processor that is winning big customers, including Anthropic.
Alphabet’s cloud computing growth has outpaced expectations and rivals, including Microsoft and Amazon, owing to greater AI integration across its offerings. Revenue in the Google Cloud segment was up by 63% in the first quarter. Investors have become increasingly confident that the company’s hundreds of billions of dollars in AI spending will pay off in the long run.
“High demand for cloud and AI offerings drove a ‘meaningful acceleration’ in growth, indicating to investors that significant ?AI investments are paying off,” Jeff Buchbinder, chief equity strategist at LPL Financial, said.
Separately, on May 9, Bloomberg reported that Isomorphic Labs, the AI‑powered drug discovery firm spun out of Alphabet’s Google DeepMind, is in advanced talks to raise over $2 billion in new funding. The round is expected to be led by Thrive Capital, which backed Isomorphic’s first raise last year, with Alphabet also participating, underscoring strong investor confidence in the company’s biotech‑AI strategy.
Alphabet Inc. is a leader in AI, investing heavily in research, infrastructure, and applications via Google. It plans up to $190 billion in capital expenditures by 2026 to support its AI initiatives.
1. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 381
Appaloosa Management Equity Stake: $753.12 Million
Alibaba Group Holding Limited (NYSE:BABA) is one of the best AI stocks to buy for 2026, according to billionaire David Tepper. On May 8, Alibaba Group Holding Limited was on the defensive, refuting claims that it was one of the beneficiaries of billions of dollars’ worth of Super Micro computer servers containing Nvidia chips smuggled into China.
Bloomberg reported that a key company behind Thailand’s national AI effort had smuggled the servers containing Nvidia chips and sold them to Alibaba, among other end customers. The allegations follow US prosecutors reiterating early in the year that Super Micro’s co-founder had worked to divert AI semiconductors in violation of US trade rules.
Alibaba insists it has no business relationship with Super Micro, OBON, or any third-party brokers that deal in servers with Nvidia chips under US control. It has also refuted claims that it is involved in the alleged smuggling activities. The Chinese AI powerhouse insists it maintains a compliance-first approach with its data center operations.
Alibaba Group Holding Limited is a leading AI player, developing its own large language models, integrating AI into its e-commerce and logistics, and offering cloud-based AI services. Its strategy centers on open-source approaches and cloud computing to boost adoption.
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