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Oracle stock fell over 40% since September despite strong RPO numbers as investors doubt OpenAI’s ability to pay bills.
Oracle maintains commitment to high-grade debt rating while expanding AI data center spending.
Apple trades at 31.2x forward P/E with potential catalysts including a Siri overhaul and foldable iPhone.
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With the first full trading week of 2026 now in the books, investors might be wondering if the strong early start in the S&P will precede even more strength. Undoubtedly, a lack of a Santa Claus rally has seemingly paved the way for a rather hot start to 2026, with some memory chip stocks really picking up momentum while certain semiconductor equipment makers made up for lost time.
While a strong first week of January really means nothing for what we could see in the rest of the year, I do think that it’s time to reflect on some of the premier names that have trailed the market and whether they have what it takes to pick up traction in this new year.
Though it’s tough to tell which AI names can outperform the pack in any given year, I do find the following trio to offer a relatively decent value for the growth you’ll get. And though it might be too soon to step in as a buyer, I find the following to be worthy of watching, not just through 2026, but going into 2027 as well, as the race to AGI moves onward. Without further ado, here are my top AI stock picks to keep tabs on for the new year and beyond.
It’s hard to know what to do with those beaten-down shares of Oracle (NYSE:ORCL) after the more than 40% drop they suffered since peaking in September. The RPO (remaining performance obligation) numbers were truly off the charts, and they’ve continued to be hot.
All that’s changed since the September spike is how investors have interpreted the Oracle growth story. Right now, they don’t seem to appreciate it all too much, given the debt load and uncertainties about whether OpenAI will be good for the money when it comes time to pay those data center bills.
Now, debt is always concerning, especially when the proceeds are invested in an effort that an investor no longer believes in. Despite growing fears of an AI bubble and doubt that flooring it on AI data centers will pay off handsomely, I find Oracle stock to be a pretty great deal at less than $200 per share.
At the end of the day, Oracle is going to proceed forward aggressively in the data center, but remains committed to maintaining its high-grade debt rating. Undoubtedly, keeping the bonds out of junk territory while finding new ways to spend on the AI data center effort has to be comforting to the AI bulls who’ve grown concerned over the surge in Oracle’s CDSs (credit default swaps).
As OpenAI raises more capital while keeping the door open for a potential IPO in 2026, I think Oracle might have room to the upside as it becomes more apparent that OpenAI will be able to pay its bills as they come due. With Jefferies Brent Thill hanging onto his $400 price target (that implies a more than doubling from here), I think Oracle stock is a must-watch for 2026.
Apple (NASDAQ:AAPL) is an interesting name to consider after sagging in the first week of the new year. Deepwater’s Gene Munster remains upbeat on the Cupertino giant despite its latest slump. In fact, he thinks the iPhone maker has what it takes to be one of the hotter Magnificent Seven performers in 2026. I’m with Munster and wouldn’t give up on Apple stock as others do. Are investors right to doubt that Apple can get Siri right?
Perhaps. But at 31.2 times forward price-to-earnings (P/E), I think you’re getting a decent deal into a tech name that can gain from the multi-year boom in physical AI. Beyond this year’s catalysts (Siri overhaul and a foldable iPhone), I think the company is more than capable of delivering a hit in consumer robots by 2030. Whether that’s the desktop robot or something more ambitious, I’d stay tuned before the rumor mill really gets spinning.
For now, the situation in Venezuela and the ongoing RAM shortage could act as forces that keep Apple from participating in the market rally. As such, investors may wish to pick their spots carefully as near-term choppiness could easily worsen.
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