Is the AI Supercycle Really Just Beginning?

Artificial intelligence has been a powerful trend on Wall Street in 2025. Although many fear that the boom in AI stocks could be setting investors up for a harsh reversal, there's still reason to believe that many companies capitalizing on AI could have years of future gains in store beyond 2026.

Looking back at the past year, some of the biggest companies in the world have been huge winners from the AI revolution. Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has jumped 59%, adding nearly $1.5 trillion to its market cap. Nvidia's (NASDAQ: NVDA) roughly 25% gain has given it the largest market cap in the global stock market. Privately held hybrid-nonprofit OpenAI's for-profit subsidiary could have an initial public offering in the near future that could value it at up to $1 trillion.

Yet while it's easy to focus on the biggest tech companies, their work relies on dozens of largely unseen businesses. Those behind-the-scenes suppliers, builders, and niche service providers could become the real winners of an AI supercycle that's just getting started. And while the return on the massive investments that hyperscalers like Amazon (NASDAQ: AMZN) and Meta Platforms (NASDAQ: META) are making is uncertain, what's quite clear is that they're willing to pay whatever it takes to move forward on their projects. That spells opportunity for the companies lucky enough to be doing business with the hyperscalers.

Image source: The Motley Fool.

What's to Come in AI in 2026

It might not seem possible, but it's likely that spending on AI will increase in 2026. Gartner projects that the nearly $1.5 trillion spent on AI efforts in 2025 will surpass the $2 trillion mark in the coming year.

A lot of that money is going toward building out the infrastructure that AI needs to operate at optimal levels. Meta believes that it should be able to bring its Prometheus data center supercluster project online during 2026. Microsoft's (NASDAQ: MSFT) construction of the most powerful AI data center in the world is slated to open its digital doors in Wisconsin early in the year. Internationally, the Stargate project in the United Arab Emirates looks good to go in 2026 as well.

All of these projects require the same things. Power to run all the equipment that goes into a data center. Connectivity to link each data center to the internet and the data it needs to let AI work. Sophisticated temperature control systems to improve performance and reduce costly downtime. Computers with cutting-edge AI chips as well as racks, cables, and sensors. And housing it all, specially built structures that can handle the unique needs that data centers have.

Where the Big Winners of the Future Are

Big-name AI-adopting tech companies have performed reasonably well lately, but the gains haven't knocked investors' socks off. Microsoft is up about 12% in the past year. Amazon? Up just 6%. And Meta has gained only 5%.

Why is that? In part, it's because history hasn't always been kind to the companies that pay the huge upfront costs of implementing new technology. Think back to the dawn of the internet. Many early internet-adopters collectively spent trillions of dollars on laying fiber-optic cable, setting up wireless networks, and linking internet nodes through the servers that would eventually evolve to enable early cloud computing. Many of those companies no longer exist. Even the ones that do – think AT&T (NYSE: T) and Verizon Communications (NYSE: VZ), for example – have largely missed out on the huge fortunes that the work they did enabled other companies to make.

Meanwhile, plenty of companies like Microsoft, Meta, and Amazon owe their success to their having capitalized on the internet's opportunities. Now, they're paying it forward to a new generation of budding AI leaders, and they're willing to spend whatever it takes to put their mark on the future.

Get Ready for a Wild Ride

Just because the AI Supercycle is just getting started doesn't mean that the stocks involved are going to move straight up. As always with the stock market, there'll be ups and downs. Some of them will be abrupt. Some will be painful to go through.

But what we've seen with past megatrends like this is that in the long run, the companies that prove to be the best at providing exactly what's necessary to bring the dreams of tech entrepreneurs to life are wildly successful. Some of them build businesses that tap into the constant need for replacement and upgrades, generating recurring revenue that ensures their future financial security.

As 2026 begins, be sure to keep your eyes on what's happening in the artificial intelligence space. We're sure it'll be interesting, and you won't want to miss it.

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Dan Caplinger has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Verizon Communications and 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.