AI Stocks Shift: 2025 Winners Decline in 2026, Creating Buy Opportunity
The market’s momentum shifted sharply from 2025 into 2026. Many AI leaders that surged last year cooled off during the first quarter.
Market backdrop and rotation
Investors fled growth stocks amid geopolitical tensions and concerns about peak AI infrastructure spending. The onset of the war with Iran contributed to a rotation into value shares.
Still, top technology growth names have delivered strong long-term returns over decades. This AI stocks shift, with many 2025 winners declining in 2026, is creating buy opportunity for some companies.
Palantir: AI operating system with momentum
Palantir Technologies (NASDAQ: PLTR) gained about 135% in 2025. The shares then fell roughly 18% in the first quarter of 2026.
Revenue growth accelerated for ten consecutive quarters. The company reported 70% sales growth in its most recent quarter.
Its Foundry AI platform acts as a data and model orchestration layer. The software links cleaned data to real-world assets and processes, reducing hallucinations.
Palantir also maintains a sizable government business. Its Maven Smart System is now viewed as a core system for the U.S. military, and its technology surfaced during the conflict with Iran.
While the stock carries a premium, valuations have become more moderate. The company could scale into a very large enterprise given its platform and limited direct competition.
Broadcom: Custom chips and networking tailwinds
Broadcom Inc. (NASDAQ: AVGO) rose about 49% in 2025 on enthusiasm for custom AI chips. The shares slid roughly 10% in the first quarter of 2026.
Custom chip design is costly and spans multiple development cycles. When customers co-develop chips, they typically commit to multi-generation programs.
Broadcom forecasted about $100 billion in custom AI chip revenue for fiscal 2027. That opportunity also strengthens its data center networking business.
Investors worried the custom business might erode hardware margins, especially for outside orders tied to Alphabet’s TPU efforts. Broadcom publicly said AI hardware margins should hold steady as the business scales.
Given the company’s customer commitments and networking exposure, the early-2026 pullback appears to offer an attractive entry point for long-term investors.
Where opportunity may lie
Not every share that fell in 2026 lost its long-term case. Some sell-offs reflected high valuations and sectorwide SaaS weakness rather than deteriorating fundamentals.
Selective exposure to firms with durable platforms and government or locked-in customer contracts may reward patient investors.
Additional research and disclosures
Filmogaz.com recently published a report on a little-known company described as an “Indispensable Monopoly.” That firm reportedly supplies critical technology used by major chipmakers.
Geoffrey Seiler holds positions in Alphabet and Broadcom. Filmogaz.com has positions in and recommends Alphabet and Palantir Technologies. Filmogaz.com also recommends Broadcom.
