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3 AI Stocks Outpacing NVIDIA in 2026 - With More Upside Ahead
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Key Takeaways
NVDA lags as TSM, Micron and Supermicro surge on AI-driven momentum.
TSM projects up to $35.8B Q1 2026 revenues and gross margin up to 65%.
Micron and Supermicro see triple-digit earnings growth on AI chip and server demand.
NVIDIA Corporation (NVDA - Free Report) has consistently posted strong quarter-over-quarter earnings, and its fiscal 2026 fourth quarter looks no different. Relentless demand for its Blackwell chips, expanding artificial intelligence (AI)-driven partnerships, and an increase in data center investment all signal continued long-term growth.
However, NVIDIA’s shares have risen just 1.8% year to date, a muted performance that has left Wall Street unimpressed. On the other hand, other AI heavyweights, including Taiwan Semiconductor Manufacturing Company Limited (TSM - Free Report) , or TSMC, Micron Technology, Inc. (MU - Free Report) , and Super Micro Computer, Inc. (SMCI - Free Report) , have significantly outperformed, climbing 21.9%, 50%, and 10.8%, respectively. Let’s thus see what’s driving their gains, and why further upside may be ahead –
Image Source: Zacks Investment Research
Rising Data Center Demand Fuels TSMC’s Momentum
With AI hyperscalers ramping up data center construction, the demand for TSMC’s chips that power these facilities is expected to rise, supporting stronger revenue and earnings growth, while potentially pushing the stock price higher.
TSMC’s leading-edge process technologies are currently experiencing strong demand, as they have in the past. As a result, the company expects first-quarter 2026 revenues between $34.6 billion and $35.8 billion, which would surpass fourth-quarter 2025’s $33.73 billion, indicating a 25.5% year-over-year increase and a 1.9% quarter-over-quarter rise, according to investor.tsmc.com.
TSMC also expects its profit margins to strengthen, projecting a first-quarter 2026 gross margin between 63% and 65%, higher than the fourth quarter 2025’s 62.3%. Consequently, TSMC is expected to see an earnings growth rate of 53.8% for the current quarter and 32.8% for the full year.
Micron Set for Solid Growth as AI Demand Fuels Chip Shortage
As data center operators and AI hyperscalers continue to increase their investments in infrastructure, demand for Micron’s high-bandwidth memory (HBM) chips is all set to rise. Ongoing supply constraints in HBM chips have created a demand-supply imbalance, which is likely to strengthen Micron’s pricing power, improve profit margins and support higher stock prices.
Sanjay Mehrotra, CEO of Micron, acknowledged that HBM chips’ incessant demand amid tight supply supports the company’s future growth. Micron expects fiscal second-quarter 2026 revenues between $18.3 billion and $19.1 billion, up from $13.64 billion reported in the fiscal first-quarter 2026, according to investors.micron.com.
Management also remains optimistic about Micron’s net income growth. Micron’s expected earnings growth rate for the current quarter and year are 444.9% and 307.6%, respectively.
Supermicro Poised to Benefit From Rising AI Hardware Demand
With AI spurring the demand for hardware, Supermicro stands to gain. The company has seen growing demand for its Data Center Building Block Solutions (DCBBS) among AI clients. This is because it is a complete package that combines integrated servers, networking, storage, and related services. DCBBS enables clients to deploy AI infrastructure more quickly and cost-effectively.
Charles Liang, CEO of Supermicro, expects the company to capitalize on the next wave of AI demand by scaling its servers and storage capabilities. Supermicro, thus, expects revenues for the fiscal third-quarter 2026 to reach $12.3 billion, following $12.7 billion recorded in the fiscal second-quarter 2026, according to ir.supermicro.com. For the full year, net sales are expected to hit at least $40 billion. Supermicro’s expected earnings growth rate for the current quarter and year are 103.2% and 7.8%, respectively.
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3 AI Stocks Outpacing NVIDIA in 2026 - With More Upside Ahead
Key Takeaways
NVIDIA Corporation (NVDA - Free Report) has consistently posted strong quarter-over-quarter earnings, and its fiscal 2026 fourth quarter looks no different. Relentless demand for its Blackwell chips, expanding artificial intelligence (AI)-driven partnerships, and an increase in data center investment all signal continued long-term growth.
However, NVIDIA’s shares have risen just 1.8% year to date, a muted performance that has left Wall Street unimpressed. On the other hand, other AI heavyweights, including Taiwan Semiconductor Manufacturing Company Limited (TSM - Free Report) , or TSMC, Micron Technology, Inc. (MU - Free Report) , and Super Micro Computer, Inc. (SMCI - Free Report) , have significantly outperformed, climbing 21.9%, 50%, and 10.8%, respectively. Let’s thus see what’s driving their gains, and why further upside may be ahead –
Image Source: Zacks Investment Research
Rising Data Center Demand Fuels TSMC’s Momentum
With AI hyperscalers ramping up data center construction, the demand for TSMC’s chips that power these facilities is expected to rise, supporting stronger revenue and earnings growth, while potentially pushing the stock price higher.
TSMC’s leading-edge process technologies are currently experiencing strong demand, as they have in the past. As a result, the company expects first-quarter 2026 revenues between $34.6 billion and $35.8 billion, which would surpass fourth-quarter 2025’s $33.73 billion, indicating a 25.5% year-over-year increase and a 1.9% quarter-over-quarter rise, according to investor.tsmc.com.
TSMC also expects its profit margins to strengthen, projecting a first-quarter 2026 gross margin between 63% and 65%, higher than the fourth quarter 2025’s 62.3%. Consequently, TSMC is expected to see an earnings growth rate of 53.8% for the current quarter and 32.8% for the full year.
Micron Set for Solid Growth as AI Demand Fuels Chip Shortage
As data center operators and AI hyperscalers continue to increase their investments in infrastructure, demand for Micron’s high-bandwidth memory (HBM) chips is all set to rise. Ongoing supply constraints in HBM chips have created a demand-supply imbalance, which is likely to strengthen Micron’s pricing power, improve profit margins and support higher stock prices.
Sanjay Mehrotra, CEO of Micron, acknowledged that HBM chips’ incessant demand amid tight supply supports the company’s future growth. Micron expects fiscal second-quarter 2026 revenues between $18.3 billion and $19.1 billion, up from $13.64 billion reported in the fiscal first-quarter 2026, according to investors.micron.com.
Management also remains optimistic about Micron’s net income growth. Micron’s expected earnings growth rate for the current quarter and year are 444.9% and 307.6%, respectively.
Supermicro Poised to Benefit From Rising AI Hardware Demand
With AI spurring the demand for hardware, Supermicro stands to gain. The company has seen growing demand for its Data Center Building Block Solutions (DCBBS) among AI clients. This is because it is a complete package that combines integrated servers, networking, storage, and related services. DCBBS enables clients to deploy AI infrastructure more quickly and cost-effectively.
Charles Liang, CEO of Supermicro, expects the company to capitalize on the next wave of AI demand by scaling its servers and storage capabilities. Supermicro, thus, expects revenues for the fiscal third-quarter 2026 to reach $12.3 billion, following $12.7 billion recorded in the fiscal second-quarter 2026, according to ir.supermicro.com. For the full year, net sales are expected to hit at least $40 billion. Supermicro’s expected earnings growth rate for the current quarter and year are 103.2% and 7.8%, respectively.
While Supermicro has a Zacks Rank #3 (Hold), TSMC and Micron have a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.