Three AI Powerhouses Worth Watching for 2026: Why These Tech Giants Are Positioned to Lead

The artificial intelligence boom has created both opportunities and pitfalls for investors. While many AI-related stocks have surged in valuation, separating genuine winners from speculation requires digging into the fundamentals. Here are three companies with real competitive advantages that could deliver strong returns for those looking at stocks to buy in the coming year.

Figma: Design Software Meets AI Innovation

Figma (NYSE: FIG) operates a cloud-based design platform that has become essential for companies building digital products. What makes Figma particularly interesting is how it’s integrating AI without replacing its core value proposition.

The company launched Figma Make this year, allowing designers to generate prototypes using natural language commands. More significantly, the acquisition of Weavy—an AI image and video generation company—signals Figma’s commitment to deepening AI capabilities across its suite. CEO Dylan Field emphasizes that “the first prompt is just a creative starting point, not the final destination,” underscoring that AI enhances rather than displaces human creativity.

Customer spending tells the story: existing clients increased their spending by approximately 31% year-over-year, demonstrating strong product stickiness. This metric reflects Figma’s powerful competitive moat—high switching costs combined with continuous innovation keep customers locked in.

However, investing in AI infrastructure has pressured margins. Gross margins declined to 86% last quarter from 92% a year ago. At a market cap of $18.3 billion (compared to $20 billion when a major competitor attempted acquisition pre-IPO), Figma trades at roughly 13 times 2026 revenue expectations. For a high-growth company with sticky customers and genuine competitive advantages, this valuation appears reasonable.

TSMC: The Indispensable Chip Manufacturer

Taiwan Semiconductor Manufacturing (NYSE: TSM) controls 71% of third-party semiconductor foundry spending—a position that reflects its unmatched technical capabilities. Companies building cutting-edge chips have no choice but to work with TSMC, creating a formidable competitive moat.

This dominance stems from two factors: superior yields per silicon wafer and massive scale efficiency. TSMC’s competitive advantage feeds itself—winning major contracts enables bigger R&D investments, which then secure even larger contracts. It’s a virtuous cycle that’s difficult for competitors to break.

While AI chips currently represent a small portion of TSMC’s business, management expects AI-related revenue to grow at a mid-40% annualized rate through 2029, significantly outpacing the overall 20% annualized growth forecast. The company plans to charge 10-20% premiums for advanced 2nm wafers while raising prices on mature technology, supporting stable margins despite continued technology investments.

At a forward P/E ratio of 25, TSMC presents attractive value for an industry leader positioned to capture sustained AI-driven demand. This is one of the most critical stocks to buy for those betting on the continued AI buildout.

Alibaba: Cloud Computing’s Hidden Growth Engine

Alibaba Group (NYSE: BABA) faces near-term headwinds in its core e-commerce business. Short-form video platforms and competitors have captured market share, prompting Alibaba to invest heavily in “quick commerce”—delivery within hours rather than days. These investments have temporarily compressed profitability.

But beneath the surface, a powerful transformation is occurring. Alibaba is China’s largest cloud provider and is deploying approximately $17.2 billion in capital expenditures annually for AI and cloud infrastructure. The results speak for themselves: cloud revenue accelerated 34% year-over-year last quarter, with AI-related revenue growing in triple digits.

Management is channeling e-commerce cash flow into this expansion. As quick commerce scales and unit economics improve, profitability will recover—while the cloud division enters a high-growth phase. At an enterprise value-to-forward EBITDA ratio below 17, investors pricing Alibaba as a mature, slow-growth business are likely mispricing significant upside.

The Key Takeaway for 2026

All three companies share a critical characteristic: genuine competitive moats that justify their market positions. Figma’s switching costs, TSMC’s technological superiority, and Alibaba’s cloud infrastructure scale aren’t easily replicated.

For investors evaluating stocks to buy heading into 2026, these three offer compelling combinations of growth potential and defensible market positions. The AI revolution will extend far beyond the headline winners of 2024-2025—and these companies are positioned to capture sustained value creation.