I Predicted AI Stocks Would Power Stock Market Gains in 2025, and They Did. Here's What May Happen Next in 2026. (And It May Surprise You.)

At the start of a new year, investors always wonder about what direction the market will take in the coming months -- and what will drive gains or losses. At the start of 2025, the future of artificial intelligence (AI) stocks looked bright as we still were in the early days of the AI boom. Companies were building up infrastructure and training AI models. And some were just starting to talk about the potential of AI agents, or software that actually addresses complex problems.

Against this backdrop, I predicted that AI stocks would power stock market gains in 2025 -- and they did, with names including Nvidia and Palantir Technologies extending their multi-year increases. Now, here's what may happen next this year -- and it may surprise you.

Image source: Getty Images.

A look at 2025

First, a quick look back at 2025. It wasn't completely smooth for AI stocks, but the important point to note is the pressure wasn't linked to any slowdown in AI. Earlier in the year, President Donald Trump's announcement of import tariffs weighed on the entire market. Then, later in the year, investors worried about the formation of a possible AI bubble -- those concerns were linked to rising valuations.

It's important to note that these fears haven't been supported by trends in demand for AI or revenue at AI companies -- both have been strong quarter after quarter.

Now, let's consider what may happen next in 2026. My prediction is that AI stocks will continue to advance, but the pattern won't be the same as in previous years. Instead, what might surprise you is that this year, we may already start to see AI winners and losers emerge. We may see which companies have what it takes to move closer to profitability, for example. Those that struggle with this and trade at high valuations may see their stock prices stagnate or tumble. And companies that don't hold a competitive advantage in the AI space may also experience weakness.

Clear signs of success

Unlike the past few years, investors won't rush to get into AI stocks in general and instead will favor companies that have demonstrated clear signs of success: A strong competitive position, innovation, and profitability are elements that may be on investors' radar screens. And, considering concerns about valuations just a few weeks ago, investors may focus on buying AI stocks that are reasonably priced.

So, what happens next is this: Only the strongest of AI companies may lead the market higher in 2026 -- and weaker players might struggle to win over investors in this environment.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.