Prediction: This Artificial Intelligence (AI) Stock Will Be the Biggest Winner of 2027
In my view, artificial intelligence (AI) stocks will once again lead the market higher in 2027. However, I think there will start to be a rotation away from the pure-play pick-and-shovel infrastructure players and toward the hyperscalers that control the bulk of the spending. And against that backdrop, I think Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is poised to be the best performing stock among AI mega-caps in 2027.
Whenever a new technological evolution is in its early phases, a large fraction of the gains go to the hardware companies that lay the foundation for it. However, in later stages, the gains should increasingly go to the companies that are benefiting from the prior investments.
This pattern could certainly be seen in the dot-com boom. Hardware giants like Cisco, Sun Microsystems, and JDS Uniphase led the early build-out, but companies like Amazon and Google (now Alphabet) were the ones that captured the vast majority of the cumulative economic value over the long run.
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