Key Takeaways NVIDIA is highlighted as a top S&P 500 pick due to its strong profitability and a 53% net income ratio.Micron earns a spot in the screen with a 28.2% net income ratio, reflecting solid earnings relative to sales. Seagate Technology, with 17.9% net income ratio, qualifies, signals cost control and revenue strength.As we near 2026, investors should seek companies that generate strong returns after covering all operating and non-operating expenses. Therefore, it’s wise to invest in a profitable c ...

Core Insights - AI stocks have shown exceptional performance in 2023, with expectations for continued momentum into 2024, supported by a projected global AI market growth to US$2,407.02 billion by 2032, reflecting a 30.6% CAGR starting in 2025 [1]. Company Analysis - NVIDIA Corporation (NVDA) and Micron Technology, Inc. (MU) are identified as top profitable AI stocks for 2026 and beyond, attributed to their high net income ratios [3][9]. - NVDA has a 12-month net profit margin of 53%, indicating strong profitability [7][9]. - MU has a 12-month net profit margin of 22.9%, also reflecting solid profitability [8][9]. Profitability Metrics - The net income ratio is a key indicator of a company's profitability, representing the percentage of net income relative to total sales revenues, with a higher ratio indicating better revenue generation and expense management [4]. - Additional screening parameters include Zacks Rank 1 (Strong Buy), trailing 12-month sales and net income growth higher than the industry, and a strong buy percentage rating greater than 70% [5][6]. Screening Results - The screening process narrowed down over 7,685 stocks to 15, highlighting NVDA and MU as qualified candidates based on their strong financial metrics [6][9].