Could This Underrated AI Stock Be Worth $5 Trillion by 2026?

Artificial intelligence (AI) has fueled stock market gains in recent years, and this has resulted in AI companies seeing their market values take off. For example, AI chipmaker Nvidia soared to a market cap of more than $4 trillion a few months ago, granting it status as the world's biggest company. It's since continued to climb, reaching the $4.5 trillion mark.

Increases in market value don't necessarily mean you should rush out to buy that particular stock. But the gains often are accompanied by positive news from the company or strong earnings performance -- elements that are driving investors to buy the stock -- so stocks with big market cap movement are worth watching.

As we head toward 2026, AI continues to drive growth, and this could carry on for quite some time considering forecasts for the AI market to climb into the trillions of dollars in a few years. This may result in more AI stocks hitting big market cap milestones. With all of that in mind, could the following underrated AI stock be worth $5 trillion by 2026?

An overlooked leader?

When I say "underrated," I don't mean this stock has done poorly or is unknown in the world of AI. Instead, I mean that it may have been overlooked by some investors as they favor younger, higher-growth companies, but this player shouldn't be underestimated just because it's a well-established market giant. It still could offer tremendous growth in the coming years thanks to its focus on AI.

I'm talking about software powerhouse Microsoft (NASDAQ: MSFT). You may know the company best for the software you use on a daily basis, either at work or at home, but this market giant has also built an enormous presence in the area of cloud computing -- allowing it to serve the needs of AI customers -- and it continues to increase that position.

In the latest fiscal year, which closed at the end of June, cloud unit Azure delivered a 34% increase in revenue to more than $75 billion thanks to AI demand. As it stands today, Microsoft has more than 400 data centers in operation throughout 70 regions. That's more than any of its rivals. The company continues to scale up at a faster pace than competitors, and all of its Azure regions are "AI-first." For example, they support liquid-cooling technology; this is important as AI workloads result in tremendous heat levels.

Capacity to run AI

All of this is key because one of the biggest needs right now -- and this seems likely to continue well into the future -- is capacity to run AI workloads. So, infrastructure companies that are able to scale up quickly are well positioned to benefit as customers seek training and inferencing compute power. Inferencing may drive a very long-lasting growth phase for AI companies because this involves powering models as they do their problem-solving jobs.

Finally, Microsoft also has a close connection with key AI player OpenAI as it has invested more than $13 billion in the research lab. This relationship could serve as another growth driver for Microsoft as the AI story develops.

Image source: Getty Images.

A 35% increase this year looks attainable

I consider Microsoft underrated, as much smaller names have blasted past it in recent times when it comes to stock performance. For instance, while Microsoft is on track for a 35% gain this year, AI cloud company CoreWeave has soared more than 200% since its March market debut.

Of course, it's more difficult for Microsoft to deliver such gains in a short period of time since it already has a market value that's considerably high at $3.8 trillion. Still, could Microsoft climb to $5 trillion by the end of 2026? For this to happen, the stock would have to gain 27%.

Considering the company's strength in AI and focus on scaling up, as well as the fact that general demand for AI capacity remains high, it's very possible that Microsoft could reach that milestone within the coming year. That, on its own, doesn't make the stock a buy right now, but Microsoft's solid earnings track record and position in the AI market do. Now is a great time to get in on this underrated AI player that soon may soar to $5 trillion.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.