The AI Boom is Likely Just Beginning And This AI Stock is a Sure Buy Today

Where some see an AI bubble forming, others see the AI boom, revolution, race, or whatever you’d like to call it, as just getting started. Of course, the truth may lie somewhere in the middle. We might not be at the peak of the AI hype, nor are we at the very beginning of this AI-driven stock market rally.

In any case, I think we’re closer to the earlier innings than the latter innings, if you want to use a baseball analogy. Indeed, the latest quarterly results of Nvidia (NASDAQ:NVDA | NVDA Price Prediction) took a bit of gas out of the AI trade for a while when its data center revenues came in below what many bulls expected.

In any case, it didn’t take too long for other AI firms to pick up the baton and lead the broad markets higher. Indeed, Alphabet (NASDAQ:GOOG) and Broadcom (NASDAQ:AVGO) have had a chance to show off their AI muscles to the world. And thus far, it’s looking like the AI trade can stay hot, even if Nvidia does a bit less of the heavy lifting. Indeed, even the world’s largest GPU maker needs a rest once in a while.

Does the AI trade really need Nvidia? Maybe not

In any case, I think it’s a mistake to think that Nvidia’s milder-than-expected quarter is a yellow light. Going into 2026, we could witness a wave of new agentic AI applications and use cases bolster the AI trade. And Nvidia might not even need to participate in the rally, as some of the lower multiples across the space look to expand.

Sam Altman may think there’s a bubble, but I’m more inclined to side with the likes of Deepwater Asset Management’s Gene Munster, who believes an AI bubble might not burst until closer to 2027. Even then, Munster doesn’t see a dot-com-esque bust, but a relatively modest 30% fall in the Nasdaq, and a probably more muted reaction in the S&P 500.

In any case, the AI run may still have a good two years and a quarter to go. Even if AI stocks tumble, AI won’t stop advancing. It’ll continue to progress, even if stocks stay grounded for a year or even a couple of years. And the true winners will emerge from the wreckage, perhaps rising without much help from the rest of the market.

Amazon

Amazon (NASDAQ:AMZN) stands out as one of the better deals in the Magnificent Seven basket, at least in my view. At 29.6 times forward price-to-earnings (P/E), AMZN stock is close to the cheapest I’ve seen it. Going into year’s end, I’d watch for a big breakout that could rival the likes of its Mag Seven peers.

Apart from the notable hedge fund buying activity in the second quarter, Amazon stands out as a firm that stands to enjoy a massive margin boost, not just at the hands of generative and agentic AI (the latter of which could go mainstream next year), but as multimodal AI finds its way into the numerous robots at its warehouses.

Indeed, robots are already helping at Amazon’s fulfillment centers. Whether we’re talking about Pegasus, Proteus, or Vulcan, Amazon seems to have a front-row seat to the robotics revolution, which could be bigger than the generative AI boom. As time goes on, I wouldn’t at all be shocked if such warehouses were to become fully (or at least mostly) autonomous. Add Zoox’s self-driving capabilities into the equation, and it’s clear that Amazon has a world of profits to be made as AI comes into its own.

Could warehouse work and delivery be mostly automated one day?

Perhaps in a decade or so from now. In any case, I think it’s closer to reality than many think. As such, I wouldn’t sleep on Amazon stock and its AI potential just because it doesn’t have a large language model that’s keeping up with the likes of ChatGPT or Gemini. Perhaps its most useful AI is not under the public spotlight. Recently, Amazon revealed an AI agent that will help third-party sellers save time and effort.

In the meantime, Amazon is investing heavily in its human workforce, recently committing to spend $1 billion in pay raises and better benefits this year. Add upskilling investments into the equation, and it seems like Amazon is one of the driving forces in helping people adapt to the disruptive force that is AI.