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 (NASDAQ:ASML) 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. (NASDAQ:ASML) 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. (NASDAQ:AMD) 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. (NASDAQ:AMD) 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.
