AI Stocks Stuck in Neutral: Time to Buy Before Catalysts Hit
Three top-notch companies in the AI sector are trading near breakeven for the year: Broadcom, Meta Platforms, and Microsoft. Despite their solid growth prospects, these stocks have underperformed the market so far in 2026.
Broadcom is a leader in data center networking and custom chip business. Its chips will be its biggest revenue contributor over the next couple of years, with huge purchase commitments from Alphabet and Anthropic. The company expects its AI chip revenue to double in fiscal 2027 and then double again in fiscal 2028 to $230 billion.
Meta Platforms has a perfect flywheel business for AI, inducing users to spend more time on its platforms, and given advertisers the tools to effectively reach their target audiences. The company recently delivered with its new Muse AI agent, which can perform various tasks for people. Updates on Muse AI agent user growth and indications that Meta is starting to monetize this product will be key catalysts.
Microsoft's cloud computing business continues to achieve robust growth, with Azure revenue climbing 43% year over year last quarter. The company's enterprise software business also grows at a solid pace, led by strong adoption of Microsoft 365 Copilot. Continued enterprise Copilot uptake and progress with its custom chips and AI models will be the next catalysts for Microsoft stock.