Buy 2 Artificial Intelligence (AI) Stocks That Are Crushing Nvidia and Palantir in 2026

This year, Nvidia shares have advanced 8%, while Palantir Technologies shares have fallen 18%. Micron Technology (NASDAQ: MU) and Comfort Systems (NYSE: FIX) have absolutely crushed those numbers, with shares increasing 59% and 77%, respectively, in 2026.

Nvidia and Palantir remain integral to the artificial intelligence economy. Nvidia develops essential data center hardware and Palantir designs popular enterprise software. However, investors have been hesitant to buy Nvidia due to concerns about the sustainability of AI spending, and they have shied away from Palantir due to concerns about its valuation.

Meanwhile, Micron Technology has benefited from an unprecedented shortage in memory chips created by the construction of AI data centers, and Comfort Systems has capitalized on strong demand for mechanical and electrical services required to keep those data centers functional.

Here's what investors need to know.

Image source: Getty Images.

Micron Technology: Up 59% year to date

Micron is a semiconductor company that develops memory chips and storage solutions for personal computers, mobile devices, data center servers, and automotive systems. The company ranks as the third-largest manufacturer of DRAM memory products, including HBM (high-bandwidth memory), and NAND flash memory products.

The construction of artificial intelligence data centers has led to tremendous demand for memory chips, creating an unprecedented supply shortage that has driven prices sharply higher. DRAM and NAND contract prices have increased roughly sevenfold over the past year, according to The Wall Street Journal. And many analysts expect memory chips to remain in short supply through 2028, if not longer.

Micron reported exceptional financial results in the second quarter of fiscal 2026, which ended in February. Revenue increased 196% to $23.8 billion, gross margin expanded 18 percentage points, and non-GAAP net income soared 682% to $12.20 per diluted share. CEO Sanjay Mehrotra told analysts, "AI hasn't just increased demand for memory, it has fundamentally recast memory as a defining strategic asset in the AI era."

As a caveat, the memory chip industry generally runs on a boom-and-bust cycle, meaning the current supply shortage will eventually become a supply glut as chipmakers increase production capacity. At that point, history says memory prices will drop, meaning Micron's earnings could decline, perhaps sharply. That makes the stock somewhat risky because no one knows when the current cycle will peak.

Nevertheless, Wall Street expects Micron's earnings to increase at 75% annually through fiscal 2028 (ends in August). That makes the current valuation of 20 times earnings seem cheap. Indeed, most analysts believe Micron stock is undervalued at its current price. The median target of $550 per share implies 21% upside from its current share price of $455.

Comfort Systems: Up 77% year to date

Comfort Systems provides mechanical and electrical services to commercial, industrial, and institutional buildings. The company benefits from significant scale, with more than 50 subsidiaries across 190 locations. Additionally, its focus on constructing mechanical and electrical systems as modular components at off-site facilities is a key advantage because it saves time and money compared to on-site construction.

In particular, Comfort Systems supplies air conditioning and specialized immersion cooling systems for data centers, which are critical in managing the extreme heat created by GPUs. The company also builds products for semiconductor manufacturers, such as clean room ventilation and climate control systems needed to meet strict filtration, temperature, and humidity requirements.

Comfort Systems reported impressive fourth-quarter financial results, driven by especially strong demand from customers in the technology sector. Revenue increased 41% to $2.6 billion and net income soared 129% to $9.37 per diluted share. Also, revenue backlog (i.e., contracted sales not yet recognized) doubled to reach $12 billion, hinting at strong future growth.

Indeed, Wall Street estimates Comfort Systems' earnings will increase at 34% annually in the next three years. Against that projection, the current valuation of 57 times earnings is tolerable, though not cheap. Most analysts think the stock is more or less fairly valued at its current price. The median target of $1,710 per share implies 4% upside from its current share price of $1,650.

Trevor Jennewine has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Comfort Systems USA, Micron Technology, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.