Artificial intelligence (AI) continues to be a dominant force propelling growth in the stock market, particularly as investors look ahead to potential gains in 2026. Over the past three years, AI stocks have been pivotal in the rally of the stock market, and various Wall Street forecasts indicate this trend is likely to persist. Analysts anticipate significant infrastructure spending on AI is set to bolster the S&P 500 index, with estimates suggesting a rise from its current level of approximately 6,964 points to as much as 8,000 points by the end of 2026.
Asset management firm DWS predicts an increase to 7,500 points for the S&P 500 by the end of this year, driven largely by AI-related growth. In light of these projections, investors are being urged to consider AI stocks that stand to benefit from this ongoing sector expansion. Among the recommended stocks are Applied Digital and SoundHound AI, which are viewed as strong candidates for investment.
Applied Digital is a significant entity within the AI hardware sector, specializing in the design, construction, and operation of data centers tailored for high-performance computing and AI applications. After a stellar performance last year, the company has made a strong start in 2026, with its stock appreciating around 50% since the beginning of the year. The firm recently reported remarkable revenue growth of 250% year-over-year, amounting to nearly $127 million for its fiscal second quarter, surpassing analysts’ expectations of $88 million. This phenomenal growth is attributed to its data center services for clients like CoreWeave and other major hyperscalers.
The company has notably begun recognizing lease revenues from CoreWeave for 100 megawatts (MW) of data center capacity, with contracts in place for an additional 600 MW across its two North Dakota campuses. Ongoing negotiations with another hyperscaler to develop U.S. data centers further bolster its prospects, alongside a substantial 15-year prospective lease revenue pipeline worth approximately $11 billion. Analysts foresee an acceleration in lease revenues over the coming 18 to 24 months, as Applied Digital prepares to deliver additional data center capacity, potentially leading to even more significant growth than the projected 61% jump to $347 million in this fiscal year.
Conversely, SoundHound AI, which encountered challenges in 2025, is witnessing a resurgence in investor confidence in the new year, with shares gaining nearly 11% to date in 2026. The company operates in the burgeoning sector of voice AI solutions, which has become increasingly relevant as businesses seek to automate tasks and enhance productivity. Geodesic Capital predicts that 75% of new contact centers deployed by 2028 will leverage generative AI, with the potential to cut operational costs by as much as 60%.
SoundHound AI has reported significant growth, expecting its revenue to nearly double to approximately $172.5 million based on guidance estimates, and analysts anticipate continued solid growth through 2026 and 2027. The company boasts a substantial bookings backlog of $1.2 billion, positioning it favorably to surpass market expectations in the near future. Analysts currently project a median 12-month price target of $15.50 for SoundHound AI, suggesting a 32% increase from current levels, and given its remarkable growth trajectory, there is potential for even greater gains.
In conclusion, both Applied Digital and SoundHound AI present compelling investment opportunities as AI continues to shape growth in the stock market. With increasing focus on AI infrastructure and innovations in voice technology, these companies are well-positioned to capture a significant share of the expanding market landscape.
