The market, and many leading AI stocks, are at an inflection point. In the near term, further volatility or even a pullback is possible. However, the longer-term opportunity remains compelling, with upside potential that extends well into 2026 and beyond.

AI capital spending is projected to reach an estimated $571 billion in 2026, and Nvidia ((NVDA Quick QuoteNVDA - Free Report) ), Broadcom ((AVGO Quick QuoteAVGO - Free Report) ), and Vertiv ((VRT Quick QuoteVRT - Free Report) ) sit at the center of this historic infrastructure buildout. These companies are among the most critical enablers of the AI expansion.

After running multiple screens focused on growth, valuation, and margin strength, these three names consistently rose to the top. Collectively, they represent exceptional businesses with durable competitive advantages and strong earnings power.

Despite their leadership positions, these stocks are not stretched on valuation and in recent weeks have experienced earnings upgrades, giving two of them top Zacks Ranks.

Recent months have been choppy in these stocks, with prices moving sideways to lower, leaving shares near technically important levels. Whether those levels hold or break in the short term is uncertain, but the risk-reward profile remains attractive at current prices regardless.

Even if further downside materializes and bearish narratives resurface, any weakness is unlikely to persist given the scale and durability of AI-driven demand. If support holds, these stocks may already be positioning for their next leg higher.

Below, I will break down the recent developments, fundamental strength of these businesses and highlight a tactical trading plan using the technical charts.

Image Source: Zacks Investment Research

Nvidia Stocks Breaks Out on Bullish Developments

Nvidia continues to anchor the AI boom as the critical infrastructure provider through its leadership in GPU technology. While 2025 was comparatively subdued for the now roughly $4.5 trillion semiconductor giant, with shares delivering a tidy 42% return, the company has remained firmly on offense.

Over the past week, Nvidia advanced its largest acquisition to date, agreeing to acquire assets from AI chip startup Groq in a deal valued at approximately $20 billion. Groq, founded by former Google TPU architects, develops high-performance inference-focused silicon that competes in certain AI workloads. While Groq described the transaction as a “non-exclusive licensing agreement,” the deal includes the integration of Groq’s CEO and senior leadership into Nvidia, signaling deeper strategic alignment.

From a competitive standpoint, the acquisition strengthens Nvidia’s already formidable moat at the leading edge of AI semiconductors.

Fundamentals also continue to move in the right direction. Analysts have resumed raising earnings estimates, earning Nvidia a Zacks Rank #2 (Buy). Consensus forecasts for next year’s earnings have climbed nearly 16% over the past two months, and longer-term projections call for 46.3% annual EPS growth over the next three to five years. At roughly 40.6x forward earnings, the valuation remains reasonable given Nvidia’s growth profile and its central role in the most powerful technology cycle in more than a decade.

The technical picture has also improved meaningfully. After months of choppy, volatile trading marked by sharp rallies and pullbacks, NVDA has made a decisive bullish turn. During the low-volume holiday period, the stock broke out from a clear descending bullish wedge, marking its most constructive advance in several months. As long as shares hold above the breakout level, the setup points to further upside as 2026 begins.

Image Source: TradingView

Broadcom Shares Consolidate at Key Price Level

Broadcom has been a core beneficiary of the AI boom since the trend began, but its importance has become even more apparent in recent months. After being viewed as a relative laggard for several years, Alphabet ((GOOGL Quick QuoteGOOGL - Free Report) ) has reasserted itself as a leader in AI and large language models. A major driver of that shift has been renewed appreciation for Alphabet’s proprietary hardware stack, most notably its Tensor Processing Units (TPUs), which Google has deployed internally for nearly a decade.

Broadcom plays a critical role in that ecosystem. While TPUs are branded as Google-designed chips, Broadcom provides the underlying expertise in ASIC design, networking, and high-speed I/O, effectively enabling Google to scale these systems reliably at hyperscale. As Alphabet rapidly expands AI infrastructure across Search, cloud services, and generative AI models, custom silicon becomes economically unavoidable. Broadcom sits squarely at the center of that transition, helping design chips optimized for inference, training, and internal workloads, areas where generic GPUs are often less cost-efficient. As Alphabet’s AI leadership has become clearer, Broadcom’s strategic importance has risen alongside it.

From a fundamentals perspective, Broadcom currently carries a Zacks Rank #3 (Hold), reflecting a pause in earnings revisions rather than any deterioration in outlook. Consensus estimates still call for 35.7% annual EPS growth over the next three to five years, and the stock trades at roughly 36x one-year forward earnings. Given that growth profile and Broadcom’s deep entrenchment in the AI infrastructure stack, valuation remains reasonable relative to peers.

Technically, Broadcom had been outperforming much of the AI complex in recent months as investors increasingly recognized its role within the Alphabet AI ecosystem. The sharp selloff following its most recent earnings report was less about weakening fundamentals and more about positioning and nuanced guidance, a classic “sell-the-news” event after a strong run. Importantly, shares found support at a level that has held up the stock since late summer. As long as that support holds, the consolidation looks constructive, and the near-term technical outlook remains encouraging.

Image Source: TradingView

Vertiv Stock Sits Within Trading Range

Vertiv remains one of the purest plays on the physical backbone of the AI buildout, supplying critical power, cooling, and thermal-management solutions to hyperscale and enterprise data centers. Recent developments continue to reinforce that positioning. Over the past several months, Vertiv has announced expanded partnerships with large data center operators and hyperscalers, while management has highlighted strong backlog growth and improving visibility tied directly to AI-driven capacity expansion. Demand for high-density cooling solutions continues to exceed expectations as next-generation AI workloads push power and thermal limits higher.

Fundamentally, the story remains compelling. Vertiv currently carries a Zacks Rank #2 (Buy) as earnings estimates continue to trend higher. Consensus forecasts call for 30.2% annual EPS growth over the next three to five years, reflecting operating leverage, improving margins, and sustained AI-related demand. While the stock trades at a 40.6x forward earnings multiple, that valuation appears justified given Vertiv’s growth rate, expanding addressable market, and increasingly important role in AI infrastructure.

The technical setup adds another layer of appeal. After a sharp advance earlier in the cycle, VRT has spent recent months consolidating within a well-defined trading range. Importantly, the stock recently bounced cleanly off support within its rising channel. The key level to watch on the upside is the ~$180 area, which marks the top of the current range. A decisive breakout above that level would likely signal the next leg higher, while continued support near the lower end of the channel keeps the risk-reward profile attractive.

Taken together, Vertiv offers a differentiated way to participate in the AI boom—not through chips or software, but through the indispensable infrastructure that makes large-scale AI deployment possible. With fundamentals strengthening and the technical picture improving, VRT remains well positioned as investors look ahead to 2026.

Image Source: TradingView

Should Investors Buy Shares in VRT, NVDA and AVGO?

Taken together, Nvidia, Broadcom, and Vertiv offer complementary exposure to the core layers of the AI buildout—compute, custom silicon and networking, and physical infrastructure. While near-term volatility is always possible, fundamentals, earnings momentum, and long-term demand visibility remain firmly intact. With each stock positioned at a critical point in the AI value chain and trading near technically important levels, the current setup favors accumulation opportunistically as the AI investment cycle extends into 2026 and beyond.