1 Surprising Chip Stock Every Investor Should Own In 2026

By Chris MacDonald Published Dec 22, 8:50AM EST

Quick Read

Frito-Lay snacks drive Pepsi’s profitability as Americans snack three times daily and salty snacks project 4% CAGR growth over the next decade.
Pepsi posted $2.12 EPS and beat estimates despite a $1.26B one-time charge this past quarter.
Pepsi raised forward guidance to 2-4% organic growth from flat, targeting low single digits after recent innovation in protein-rich snacks.

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1 Surprising Chip Stock Every Investor Should Own In 2026 — © Fotoatelie / iStock Editorial via Getty Images

I’m being facetious with the title, in discussing PepsiCo (NASDAQ:PEP | PEP Price Prediction) as a top chip stock to buy in 2026. The snack and carbonated beverage giant has seen impressive long-term growth, and is among the most notable blue-chip companies I continue to think warrants a buy and hold strategy in 2026 and beyond.

Aside from the company’s world-class brand power, and its willingness to expand into key snack categories I’d argue differentiates Pepsi from its main competitor, Coca-Cola (NYSE:KO), the company has a number of other key factors going its way. This is a premier consumer discretionary stock I think is with buying right now, with its robust growth, dividend yield and unmatched exposure to a sector that should remain both stable and dynamic key to its success over time.

If Pepsi can continue to innovate and dominate the key areas of the market its management team is eyeing, this is a stock that could see significant growth next year. Here’s my bull case behind why I think Pepsi could be the chip stock to own in 2026.

Snack Business Remains Very Strong

Bag of Lay’s barbecue chips

One of the key profit drivers for Pepsi has become its Frito-Lay snack division in North America. This is an absolute powerhouse of a business unit, with iconic brands such as Doritos, Lay’s and Cheetos commanding massive shelf space and loyalty. With American snacking three times per day, and salty snacks projected to grow at a 4% CAGR over the next decade, this is a category Pepsi should continue to eat up market share, particularly as top brands command much greater sales growth than other no-name brands.

Additionally, a stabilization in U.S. volumes, as well as strong global growth trends form this category, could lead to further market share and margin gains over time. I’m of the view that the company’s acquisition of Frito-Lay was one of the best deals for investors, diversifying the company’s cash flow profile and making Pepsi into a true global powerhouse poised to continue to grow, no matter what happens in the carbonated beverages market.

Fundamental Strength Worth Paying Attention To

Financial statements with a calculator and stethoscope

Pepsi’s fundamentals are among the best in the consumer discretionary sector. This past quarter, the company posted $2.12 in EPS, brain expectations, with revenue growth also beating estimates. Now, there was a low bar put in place by analysts, with the consensus analyst pricing in negative growth overall this past quarter. Accordingly, I’d like to see a reaccerlation of growth moving forward.

The reality is that the market is viewing Pepsi as more of a margin and pricing power play than a pure growth story. In fact, this company’s high-growth days are likely well behind it. From here, the company will benefit from operational efficiencies and bottom-line growth, which I think is more realistic. But on the organic growth front, a 2.1% increase in same-store sales driven by the company’s international expansion is intriguing.

So long as Pepsi can continue to show solid operating resilience, and doesn’t see the same one-time costs hit its books (a $1.26 billion charge hit Pepsi this past quarter), it’s game on for this top “sin stock” on Wall Street.

Innovation Bolsters Forward Guidance

Growth in the stock or crypto market. Price action going up. Economic growth, pump

Green arrow heading up and to the right

Finally, I think the last key factor which should drive consistent investor demand is Pepsi’s innovation and growth within the snack space. The company is increasingly focusing on health and functionality, introducing new lines of protein, whole grains, and simple ingredients in a bid to meet Gen Z buyers where they’re at.

I’m not so sure about this strategy, to be honest. That said, I’ve never seen a company produce such products consumers continue to come back for more with. If Pepsi can find the magic bullet in the convenient (and healthy) snack food segment, there’s a potentially massive market which can be pursued. And with a new three-pronged growth strategy including a portfolio refresh, innovation acceleration, and marketing optimization, Pepsi looks well positioned to capture more market share and increase its 3.8% dividend further.

This past quarter, Pepsi raised its forward guidance to low-single-digits, up from relatively flat, as the company seeks 2%-4% organic growth. If these numbers can be achieved, I think the company’s recent innovations around protein-rich snacks could drive a beat and significant appreciation over the coming year. Pepsi is one of my top picks for 2026 in this regard.

About the Author Chris MacDonald →

Chris MacDonald is a 24/7 Wall St. contributor and long-time contributor to other notable finance publications, including The Motley Fool and InvestorPlace. With an MBA in Finance, and more than a decade of experience in venture capital and the corporate finance world, Chris brings a long-term perspective to his analysis of equities and alternative assets.

His love of investing and focus on finding quality undervalued stocks is complemented by recent research into alternative assets as well. He takes a long-term approach to analyzing companies and cryptos, with a focus on directing the reader to the most sustainable and important catalysts for each respective potential investment.