Analysts forecast AI infrastructure stocks to outperform S&P 500 in 2026
With the artificial intelligence narrative moving beyond model training into practical deployment, capital expenditure plans from tech giants suggest a surge in demand for chips, servers, and data centres that could drive significant revenue growth for infrastructure specialists.
Analysts predict that stocks focused on artificial intelligence infrastructure will significantly outperform the S&P 500 in 2026. This outlook is driven by a projected capital expenditure of approximately $700 billion from major technology companies, including Amazon, Alphabet, Microsoft, and Meta. The spending aims to meet existing customer commitments as the industry transitions from the initial research phase to the deployment of AI models in real-world applications.
This shift in narrative marks a critical moment for the sector. While the initial boom was powered by the training of large language models, the current phase requires continued heavy investment in infrastructure capacity to support the use of freshly trained models for solving practical problems. Consequently, the surge in demand for chips, servers, and data centres is expected to drive explosive revenue growth for infrastructure players such as Nvidia and Broadcom.
Recent earnings data supports the bullish sentiment, with Alphabet, Amazon, and Meta pushing S&P 500 earnings growth to over 27 per cent, the highest level recorded since 2021. Amazon specifically forecasts capital spending of $200 billion this year to serve the needs of Amazon Web Services customers, aiming to monetise these investments over the next two years. FactSet senior earnings analyst John Butters noted in a May 4 note that these reports indicate soaring demand for AI capacity.
Valuation metrics suggest the market may be poised for a rebound, with Morningstar indicating that AI stocks are currently trading at their biggest discount in seven years. Earlier this year, investors rotated out of some major tech players, though analysts suggest this move may have been temporary. The background context shows that the Magnificent Seven tech stocks drove the S&P 500 higher over the past three years, and the current infrastructure build-out represents a continuation of that trajectory.
The Motley Fool, the source of the primary prediction, holds positions in and recommends Alphabet, Amazon, Broadcom, Meta, Microsoft, Nvidia, and Oracle. Adria Cimino holds positions in Amazon and Oracle. The institution notes that the infrastructure stack required for AI training and use includes the full range of components from networking equipment to complete data centres.
As the narrative shifts from initial model training to the deployment phase, the requirement for chips, networking, and data centre capacity remains robust. This growth, combined with attractive valuations, may prompt investors to return to the sector, with the prediction being that these infrastructure players will crush the market in 2026.
