In this article, we will discuss Harvard University Stock Portfolio 2026: Top 5 Picks. Please visit the Harvard University Stock Portfolio 2026: Top 10 Picks, if you would like to see the extended list and the methodology behind it.
5. Booking Holdings (NASDAQ:BKNG)
Harvard’s Stake: $147,058,057
Booking Holdings (NASDAQ:BKNG) is down roughly 21% so far this year amid fears over weakening travel demand, macro uncertainty, and the ongoing Middle East conflict. But some analysts believe the selloff represents a golden opportunity to accumulate shares at a significant discount to intrinsic value. Despite the headwinds, Q1 revenue jumped 16.2% year over year — or roughly 10% in constant currency — with the Iran conflict estimated to have caused a 2 percentage point hit on room nights and a slightly smaller impact on revenue. For the full year, management expects high single-digit revenue growth and low mid-teens adjusted EPS growth, with gross bookings projected to grow in the high single digits to low double digits.
Looking into Q2, the conflict headwind is expected to intensify to roughly 3 percentage points on room night growth, bringing guidance down to just 2%–4% — a number that would be closer to 5%–7% in a normalized environment. Booking Holdings (NASDAQ:BKNG) has also flagged that major upcoming US events, including the FIFA World Cup and America’s 250th anniversary celebration, risk delivering underwhelming results due to currently weak bookings.
Longer term, bulls point to several compelling drivers. Booking Holdings’ (NASDAQ:BKNG) Agoda platform is well-positioned to capture high-growth Southeast Asian travel markets, one of the fastest-recovering and fastest-growing regions globally. On AI, the narrative is more tailwind than headwind — rather than disrupting Booking’s business, AI is being used to accelerate innovation and advance Booking Holdings’ (NASDAQ:BKNG) Connected Trip ecosystem.
Despite concerns that the Iran conflict could weigh on travel demand, recent data suggest consumers remain committed to their vacation plans. United Airlines said it expects to carry about 53 million passengers this summer, roughly 3 million more than last year, driven by strong demand for trips tied to major events such as the 2026 FIFA World Cup, the August solar eclipse in Europe and major concert tours. The airline’s outlook adds to signs that leisure travel demand remains resilient even as higher fuel prices and geopolitical uncertainty push travel costs higher.
Wedgewood Partners stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its Q1 2026 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) detracted from overall performance during the quarter. Earnings per share grew +17%, with revenues up +16%, as travel demand remained strong late into 2025 and into early 2026. Most of the stock’s weakness stemmed from investors labeling it an “AI loser” and, later in the quarter, the outbreak of war in the Middle East. Consumer AI, as a disruptive force in existing commerce, is proving to be much more difficult than markets expect. We view these AI tools and distribution channels as incremental rather than as drivers of the “zero-sum” dynamics that markets have been craving. As for the Middle East, for now, it represents a short-term disruption to travelers, particularly air travelers, given credible risks to international airline fuel supplies. However, we expect this will not be a multi-year headwind – more like a few quarters.”
4. Amazon.com (NASDAQ:AMZN)
Harvard’s Stake: $149,441,848
Amazon.com (NASDAQ:AMZN) is among the top beneficiaries of the AI revolution, yet its stock hasn’t received nearly the same appreciation as peers like Google and Nvidia — which many analysts see as a clear opportunity. Its AWS cloud platform is used by more than 90% of the Fortune 100, making it the largest cloud provider globally and the backbone of enterprise cloud infrastructure. Amazon.com (NASDAQ:AMZN) has committed $200 billion in CapEx for 2026 — the largest AI capital budget of any company in the world. A big part of that is going toward Amazon’s own custom AI chips, called Trainium, which have been gaining serious traction. Amazon deployed over 2.1 million AI chips in the past 12 months, with Trainium now accounting for more than half of those deployments. The chip business has secured major compute deals including 2 gigawatts with OpenAI and 5 gigawatts with Anthropic.
Beyond infrastructure, Amazon.com (NASDAQ:AMZN) holds significant equity stakes in OpenAI, acquired for $50 billion, and approximately a 17% stake in Anthropic. Amazon’s advertising business has quietly become the third largest in the world behind Google and Meta, generating over $15 billion per quarter in largely high-margin revenue.
Artisan Value Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2026 investor letter:
“We initiated four new positions in Q1, an above-average pace of activity. Typically, we add 1–2 new positions per quarter, averaging 1.7 per quarter over the past 5 years. Increased market volatility and greater dispersion in US equities created more opportunities to invest in companies that meet our three margin of safety criteria: attractive business economics, sound financial condition and compelling valuation. We also used the increased volatility to upgrade overall portfolio quality. Our three largest new positions were Amazon.com, Universal Music Group (UMG) and IQVIA Holdings.
Amazon.com, Inc. (NASDAQ:AMZN) represents a high-quality, wide-moat franchise where near-term investment is potentially obscuring substantial long-term earnings power. The company’s core retail platform is underpinned by its logistics network built over decades and enhanced by significant investment during COVID that doubled the network. This infrastructure continues to drive efficiency gains and customer value, reinforcing Amazon’s dominant market position. Complementing this is AWS, the original hyperscale cloud platform and a critical profit engine, contributing roughly 60% of operating income. AWS remains a leading cloud platform and a key profit driver, with strong positioning in AI supported by proprietary chips such as Graviton and Trainium. Despite elevated capital expenditures tied to AI, logistics and other growth initiatives, Amazon’s financial position remains exceptionally strong, with significant net cash and a well-laddered debt profile. Current earnings understate normalized profitability, in our view, due to heavy reinvestment across multiple initiatives, including AI infrastructure, robotics and new delivery capabilities. As these investments mature, we believe both revenue growth and margins should expand. At our initial purchase, the stock traded near historic valuation lows relative to its earnings power, offering an opportunity to own a premium, structurally advantaged business at a market-like multiple, with potential additional upside from its fast-growing, high-margin advertising segment.”
3. Alphabet (NASDAQ:GOOGL)
Harvard’s Stake: $177,413,018
Alphabet (NASDAQ:GOOGL) is proving the AI doubters wrong. The fear was that AI would cannibalize Google Search. The reality is the opposite. Search is growing faster because of AI, not slower.
In Q1, Google Search revenue rose about 19%. Users are not abandoning Google. They are using it more. AI Overviews and AI Mode are driving deeper engagement, not replacing it. YouTube is benefiting too. Ad revenue grew 11%, supported by AI-driven targeting that is making ads more relevant and more effective.
Gemini is scaling rapidly. The standalone app has reached approximately 750 million monthly active users. When you include Google Search AI Overviews and AI Mode, Gemini’s models now power over 2 billion monthly users. Enterprise adoption is also accelerating. More than 8 million paid enterprise seats have been sold across thousands of companies. Over 13 million developers globally are now building on Gemini. These are not small numbers.
Google Cloud is the biggest catalyst in the story. Revenue grew 63% in Q1. Operating margins are expanding sharply as the business shifts toward higher-value enterprise workloads. The Cloud backlog stands at approximately $460 billion. That is not potential revenue. That is contracted, visible, future revenue. It gives enormous confidence in the growth runway ahead.
Alphabet (NASDAQ:GOOGL) also has a hardware advantage that is often overlooked. Its custom TPU chips reduce its dependence on external AI compute and improve cost efficiency. As AI workloads scale, this becomes an increasingly powerful edge.
L1 Capital International Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q1 2026 investor letter:
Portfolio adjustments during the March 2026 quarter were relatively modest, but deliberate. We trimmed investments in AerCap, Alphabet Inc. (NASDAQ:GOOGL), HCA Healthcare and Weir Group at prices around the top end of our assessed fair value range, with all of these businesses benefitting from positive sentiment intra-quarter. Alphabet’s share price has more than doubled over the past 12 months. This reflects strong performance in core Search, continued momentum in Google Cloud Platform, and better-than-expected progress in AI (Gemini). Today Alphabet has a market capitalisation approaching US$4 trillion. Share prices and fair value are not always aligned, even for the world’s largest companies.
2. Microsoft (NASDAQ:MSFT)
Harvard’s Stake: $189,921,271
Microsoft (NASDAQ:MSFT) is down about 15% so far this year. The biggest overhang is the impact of AI on software.
The key fear is straightforward. If AI tools like Claude, ChatGPT, and others can do everything, why would companies still pay for Microsoft software? That is the question weighing on the stock.
There is a second fear, too. Microsoft (NASDAQ:MSFT) may need to integrate powerful external AI models into its products. Every time a user interacts with Copilot, Microsoft may have to pay for tokens consumed from AI providers. This cuts into margins. The more AI is used, the more it costs Microsoft.
However, there are strong reasons to believe Microsoft (NASDAQ:MSFT) can fight back. The company has unmatched penetration in the enterprise. Every major company in the world runs on Microsoft software — Word, Excel, Teams. That does not go away overnight.
Management is also working on its own AI models. They expect to launch internal models by 2027. If successful, this would significantly reduce the cost of running AI inside Microsoft’s products and help protect margins.
Azure is another major catalyst. In the latest quarter, Azure grew 40%. This is critical. Even if Microsoft loses some ground on the software side, companies still need Microsoft’s cloud infrastructure to deploy AI. Azure wins either way.
Amid all the fear, the stock has de-rated sharply. Microsoft’s (NASDAQ:MSFT) PEG ratio currently sits at around 1.53, which is approximately 16% below its 10-year median of 1.82. A PEG ratio measures how much you are paying for a company’s growth. The lower it is, the cheaper the stock is relative to its earnings growth. For a company growing revenue at 15% and EPS at 18%, this valuation looks very attractive. The article describes it as the cheapest valuation in a decade — the fear is already priced in.
Impax Global Environmental Markets Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) (Cloud Computing, US) sold off as investors expressed worries about AI-related infrastructure spending and companies’ ability to monetise these investments. The market responded poorly to results, despite Microsoft delivering another very strong quarter with top and bottom-line beats.”
1. Taiwan Semiconductor (NYSE:TSM)
Harvard’s Stake: $232,102,708
Taiwan Semiconductor (NYSE:TSM) is the biggest holding of Harvard Management, as of the end of the first quarter.
TSMC is one of the biggest beneficiaries of the AI revolution. It manufactures the world’s most advanced semiconductors. Every major AI chip and high-performance processor is made in TSMC’s fabs. 74% of Taiwan Semiconductor’s (NYSE:TSM) wafer revenue comes from advanced nodes (7nm and below). No competitor can match TSMC at this scale.
This gives it a powerful and durable moat. New process technologies like A13 and N2U are already in development. TSMC is expected to stay ahead of rivals for years to come. Margins are expanding dramatically. Gross margin rose 7.4 percentage points year-over-year. Operating margin hit 58.1% in the latest quarter. Taiwan Semiconductor (NYSE:TSM) has significant pricing power. Costs are being managed very efficiently. Revenue growth is equally impressive. Q1 revenue jumped 40.6% year-over-year. For the full year, the company expects growth of over 30%. AI demand shows no signs of slowing down. Despite all this, the stock trades at a forward P/E of just 26. That is only a slight premium to the broader tech sector. The valuation is still below levels seen in late 2025. For the world’s most critical chip maker, that price looks very reasonable.
Green Alpha Investment stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2026 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has commenced mass production of 2nm chips using nanosheet Gate-All-Around transistors—the most significant architectural leap in a decade—with initial yields already reaching 70-80%, well ahead of any competitor. The N2 node delivers a 15% performance boost at the same power or a 25-30% reduction in power consumption versus 3nm, and TSMC expects to reach 100,000 wafers per month of 2nm capacity by year-end 2026. Apple, NVIDIA, AMD, and Google have all secured capacity, and 2nm revenue is projected to surpass 3nm and 5nm combined by Q3 2026.
TSMC is effectively the world’s sole manufacturer of bleeding-edge silicon at scale, with 38% of the $320 billion global foundry market and a technology lead that Samsung and Intel cannot close in the near term. With $56 billion in planned 2026 capex and pricing power to raise wafer prices 5-10% across all sub-5nm nodes, TSMC’s competitive moat is widening, not narrowing. As AI workloads demand ever more advanced process nodes and advanced packaging (CoWoS capacity expanding 70%+ annually), TSMC sits at the absolute center of the AI compute supply chain.”
While we acknowledge the potential of TSM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSM and that has 100x upside potential, check out our report about the cheapest AI stock.
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