ZACKS·2025-12-26 20:01Market Overview - The market and leading AI stocks are at an inflection point, with potential for near-term volatility or pullback, but long-term opportunities remain compelling, extending into 2026 and beyond [1] - AI capital spending is projected to reach approximately $571 billion by 2026, with Nvidia, Broadcom, and Vertiv positioned as critical enablers of this infrastructure buildout [2] Nvidia - Nvidia is a key player in the AI boom, leading in GPU technology, and has seen a 42% return in 2025 despite a subdued year [6] - The company has advanced its largest acquisition to date, acquiring assets from AI chip startup Groq for about $20 billion, which strengthens its competitive position in AI semiconductors [7][8] - Analysts have raised earnings estimates for Nvidia, leading to a Zacks Rank 2 (Buy), with a consensus forecast of nearly 16% earnings growth for the next year and 46.3% annual EPS growth over the next three to five years [9] - The technical picture for Nvidia has improved, breaking out from a descending bullish wedge, indicating potential for further upside as 2026 approaches [10] Broadcom - Broadcom has become increasingly important in the AI ecosystem, particularly as Alphabet reasserts its leadership in AI and large language models [12] - The company plays a critical role in supporting Alphabet's AI infrastructure, providing expertise in ASIC design and networking, which is essential for scaling AI systems [13] - Broadcom currently holds a Zacks Rank 3 (Hold), with consensus estimates projecting 35.7% annual EPS growth over the next three to five years, and trades at approximately 36x one-year forward earnings [14][15] - The stock has shown resilience, finding support after a selloff, and the technical outlook remains encouraging as long as that support holds [16] Vertiv - Vertiv supplies essential power, cooling, and thermal-management solutions for data centers, reinforcing its position in the AI infrastructure buildout [17] - The company has announced expanded partnerships and highlighted strong backlog growth tied to AI-driven capacity expansion, with consensus forecasts indicating 30.2% annual EPS growth over the next three to five years [18] - Vertiv trades at a 40.6x forward earnings multiple, which is justified by its growth rate and role in AI infrastructure [18] - The stock has been consolidating within a defined trading range, with a key resistance level around $180, indicating potential for further upside if that level is broken [19][23] Investment Consideration - Nvidia, Broadcom, and Vertiv collectively offer complementary exposure to the AI buildout, covering compute, custom silicon, networking, and physical infrastructure [24] - Despite potential near-term volatility, the fundamentals, earnings momentum, and long-term demand visibility for these companies remain strong, favoring opportunistic accumulation as the AI investment cycle extends into 2026 and beyond [24]