Wall Street is no longer blindly rewarding all artificial intelligence (AI) stocks.
According to a recent Reuters poll, most economists now expect the Federal Reserve to keep the federal funds rate at 3.5% to 3.75% for the rest of 2026
With capital remaining expensive, investors need to focus on companies that can convert AI spending into durable revenue and profits. Against this backdrop, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT) stand out. Here’s why. 1.
Alphabet Alphabet is using its AI infrastructure base to strengthen multiple growth engines, including Search, Google Cloud, Tensor Processing Units (TPUs), Gemini models, and the Waymo autonomous-driving platform. The clearest evidence of this strategy’s success is the Google Search business, which continues to grow despite fears of cannibalization from AI answer engines. In the first quarter of fiscal 2026, Google Search & other advertising revenue grew 19% year over year to $60.4 billion.