3 Red-Hot Growth Stocks to Buy in 2026

Analysts at Bank of America believe artificial intelligence (AI) remains "the place to be" in 2026. Their perspective makes sense considering the tremendous growth expected for the AI industry. Forecasts predict AI's market size will reach $347 billion in 2026, and skyrocket to nearly $2 trillion by 2031. Given the AI sector's scorching expansion, what are some similarly red-hot stocks to capitalize on this growth?

Three to consider are Micron Technology (NASDAQ: MU), Iren (NASDAQ: IREN), and Google parent Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG). Micron saw shares soar more than 200% over the past 12 months through the week ended Jan. 16. Iren's stock was up over 300%, and Alphabet notched a 68% increase in that time.

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Micron's essential AI product

Micron isn't a household name like Google, but it's an attractive AI stock to invest in due to its role in the AI ecosystem. The company sells computer memory chips, a key component for AI systems. Microsoft CEO Satya Nadella explained the importance, stating, "We're entering an era where AI is being built into every application ... and memory is foundational to delivering that intelligence with the performance and efficiency needed at scale."

The customer demand for its memory products is so great, Micron inaugurated a new manufacturing hub in New York on Jan. 16, which the company described as "the largest semiconductor facility in the United States." The same day, its shares spiked to a 52-week high of $365.81.

The share price rise is understandable given Micron's strong sales. In its fiscal first quarter, ended Nov. 27, the company's revenue reached $13.6 billion versus $8.7 billion in the prior year. This led to Q1 net income of $5.2 billion, representing explosive growth over the previous year's $1.9 billion.

Micron anticipates booming demand to continue, forecasting fiscal Q2 revenue of about $18.7 billion. That's more than double the $8.1 billion made in the prior year.

Iren's pivot to AI

Iren operates in a niche within the cloud computing industry called neoclouds. A neocloud is a cloud provider that specializes in data center infrastructure optimized for AI. The company amassed potent computing power for its cryptocurrency mining operations. The tremendous growth opportunities afforded by AI led Iren to expand into renting its tech infrastructure to hyperscalers, the large companies building the biggest AI models.

Hyperscalers require so much computing capacity that they've turned to neoclouds. In November, Microsoft signed a five-year agreement with Iren worth $9.7 billion. As AI models evolve and necessitate greater computing horsepower, demand for Iren's services is likely to increase. Moreover, the company possesses a critical advantage that supports its growth.

Iren smartly invested in land and renewable energy for its facilities. This reduces its expenses, especially given expected increases in energy costs from an impending electricity shortage as hyperscalers rush to access more compute capacity. Iren's vertically integrated business will help it maintain financial health as it invests in expansion.

The company is doing well. In its fiscal first quarter, ended Sept. 30, revenue hit a record $240.3 million, a spectacular 355% year-over-year increase. Once the Microsoft deal begins generating revenue, Iren's sales should see further growth.

AI is Alphabet's growth engine

What makes Alphabet an attractive AI stock is its proven success with artificial intelligence. That wasn't always the case. Google faced a threat to its search engine dominance when OpenAI's ChatGPT exploded on the scene.

However, the story has changed. In the third quarter, Alphabet's revenue rose 16% year over year to $102.3 billion. The strong growth was propelled by Google, which enjoyed Q3 search sales of $56.6 billion, compared to $49.4 billion in the year-ago period. The company attributed Google's rising revenue to AI, with CEO Sundar Pichai stating: "AI is driving an expansionary moment for Search. As people learn what they can do with our new AI experiences, they are increasingly coming back to search more."

Alphabet is investing heavily to maintain its AI strength. Its Q3 capital expenditures were nearly $24 billion, an enormous 83% year-over-year increase. It also recently purchased Intersect, a data center and energy business specializing in renewable power. Intersect will help Alphabet provide electricity to its data centers as the tech conglomerate continues its AI expansion.

Alphabet has the deep pockets to fund ongoing AI growth. It exited Q3 with free cash flow of $24.5 billion and net income of $35 billion, up from $26.3 billion in 2024.

Alphabet, Micron, and Iren are all prospering from AI tailwinds, and investing in them delivers another benefit. They each tackle a different segment of the AI industry, providing you with a diversified investment portfolio.

Bank of America is an advertising partner of Motley Fool Money. Robert Izquierdo has positions in Alphabet, Bank of America, and Microsoft. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends Micron Technology 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.