In this article, we will discuss the 12 Best Stocks to Buy for the AI Boom in the Second Half of 2026.
Artificial intelligence continues to dominate Wall Street’s investment narrative heading into the second half of 2026. While the recent flare-up in US-Iran and Russia-Ukraine conflicts may have investors closely monitoring inflation and interest rates, the largest tech companies continue to commit big bucks to AI infrastructure spending to support the growing compute demand from AI models and applications.
Speaking on CNBC on July 7, Deepwater Asset Management Managing Partner Gene Munster said that AI buildout is still in its early innings, and that AI-related capex growth rate for 2026, 2027, and 2028 will be higher than people expect. The Deepwater analyst noted that capex is one of the key metrics related to the health of the AI stocks trade.
“The Street is looking for 23% capex growth from the hyperscalers for next year…a few weeks ago, that was 17%…the numbers are going to be up around 37%, so much higher,” said Munster.
According to the analyst, the actual AI use remains limited at this point, and so a massive growth opportunity still lies ahead. Munster cited autonomous ride share as an example. He noted that autonomous rides are going to account for only 0.6% of the total ride share market in 2026 and about 1.5% in 2027. “So that’s on the physical AI side, not to mention on the application side,” the analyst said.
Wall Street expects AI spending to continue driving corporate profits and equity performance for the foreseeable future. In 2026, S&P 500 earnings are expected to rise by more than 26%, according to LSEG IBES.
Companies across diverse industries, including semiconductor, cloud infrastructure, software, and cybersecurity, are positioning themselves to benefit from AI adoption. For investors, the opportunities are vast and extend beyond the mega-cap tech leaders that have driven much of the recent market gains.
That said, let’s explore some of the best stocks to buy for the AI boom in the second half of 2026.
Our Methodology
For this list of the 12 best stocks to buy for the AI boom in the second half of 2026, we filtered for companies catering to the broader artificial intelligence sector. We picked stocks with at least 15% upside potential. Next, we reviewed the overall hedge fund sentiment around these stocks using Insider Monkey’s Q1 2026 database and picked out stocks backed by at least 30 hedge funds. Finally, the stocks were ranked in ascending order based on upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Best Stocks to Buy for the AI Boom in the Second Half of 2026
12. Keysight Technologies Inc (NYSE:KEYS)
Number of Hedge Fund Holders: 66
Stock Upside Potential: 18.28%
Keysight Technologies Inc (NYSE:KEYS) is one of the best stocks to buy for the AI boom in the second half of 2026. Keysight shares are up more than 56% year-to-date and have surged more than 96% over the past year. Analysts see more upside in Keysight stock, and some 66 hedge funds have the stock in their portfolio.
Keysight Technologies Inc (NYSE:KEYS) has teamed up with WIN Semiconductors to tackle a big problem for the semiconductor industry. They have come up with a design workflow solution to help customers reduce design risk in their radio frequency (RF) development process.
This workflow solution connects multiple processes into a single point. Also, the workflow automates steps like simulation, optimization, and verification. This ensures that no analysis is skipped before the chip design is submitted for production.
According to Keysight, any flaw not detected before a chip design is sent to the foundry can lead to costly and time-consuming chip design revision work. The workflow that Keysight has built with WIN Semiconductors helps engineers avoid design flaws. Keysight said this workflow solution is suited for those developing chips for projects like 5G base stations, defense radar systems, and Wi-Fi access points.
Keysight Technologies Inc (NYSE:KEYS) provides AI solutions to speed up product design and development. Its work covers validation, emulation, and simulation. Keysight helps clients in areas like building AI networks, designing data center infrastructure, and advancing 6G research.
11. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Holders: 170
Stock Upside Potential: 20.34%
Apple Inc (NASDAQ:AAPL) is one of the best stocks to buy for the AI boom in the second half of 2026. Since the year began, Apple shares have returned more than 48%, and analysts expect them to keep rising. Elite investors continue to show confidence in Apple as the company leverages AI to make its products better. Some 170 hedge funds have positions in Apple stock.
Apple Inc (NASDAQ:AAPL) is far ahead in the smartwatch AI race. According to a market report from Counterpoint Research released on July 6, Apple accounted for 90% of AI-capable smartwatch devices shipped in Q1 2026. During that quarter, the shipment of AI-capable smartwatches increased 70% year-over-year to reach 25% market penetration.
The report focused on smartwatch devices with edge AI capabilities. These are smartwatches designed to handle AI processes locally on the device without needing to send the data to the cloud or a paired smartphone.
Apple’s smartwatch sales are tucked under the Wearables, Home, and Accessories segment. This segment revenue rose to $7.9 billion in Q1, up from $7.5 billion in the prior year.
Apple Inc (NASDAQ:AAPL) builds smartphones, laptops, tablets, and other devices. The company also provides a wide range of software and services. Apple is incorporating AI into its products to enhance their capabilities.
