These Artificial Intelligence (AI) Stocks Have Crushed Nvidia in 2026 With Gains of 67% and 121%. They Can Still Soar Higher
Publish Date: 2026-05-30 15:38:00
Source Domain: www.theglobeandmail.com
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Lumentum Holdings’ Exponential Growth: Lumentum Holdings has experienced significant growth, attributed to its demand in optical and photonic components essential for AI infrastructure. The company’s revenue surged by 72% year over year, driven by higher demand in data centers to reduce latency in transmitting large datasets.
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Applied Materials’ Accelerating Growth: Applied Materials is benefiting from a robust semiconductor equipment market fueled by AI. The company’s revenue and earnings increased by 11% and 20% respectively in the Q2 of fiscal 2026, and its guidance indicates a forecasted acceleration in growth, projecting a 23% increase in revenue and earnings growth of 36% for the current quarter.
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Nvidia’s Underperformance in 2026: Despite ongoing quarterly excellence, Nvidia has only seen a 12% stock increase in 2026, lagging far behind the PHLX Semiconductor Sector index’s 74% jump this year. This underperformance seems counterintuitive given its pivotal role in AI hardware.
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Market Surge of Lumentum and Applied Materials: Both Lumentum and Applied Materials stocks have seen impressive year-to-date gains in 2026. Lumentum’s stock rose by 121% while Applied Materials’ rose by 67%, driven by the massive investments in AI infrastructure that these companies supply.
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Future Upside Potential: Analysts predict substantial growth for both companies in the future. Assuming Lumentum’s valuation drops to 50 times forward earnings and earnings per share rises to $28.12, its stock price could hit $1,406, indicating a potential 64% upside. Similarly, Applied Materials might hit $837, signaling an 86% upside, assuming earnings reach $19.48 and it trades at 43 times earnings.
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Market Dynamics and Investment Prospects: Both companies are benefiting from significant market growth trends, with Lumentum’s components alleviating bottlenecks in AI infrastructure and Applied Materials servicing the booming semiconductor equipment demand. These factors offer a compelling case for continued and future investments, barring individual investment strategy considerations.
