Top AI Stocks Outperform Nvidia in 2026 with Remarkable Gains and Future Potential

Key Points

• Lumentum Holdings’ optical components and photonics products help solve a key bottleneck in AI infrastructure, which is why the company has been enjoying exponential growth.

• Applied Materials’ growth is accelerating amid a surge in semiconductor equipment spending, and its strong earnings growth potential suggests more upside.

• 10 stocks we like better than Applied Materials ›

Artificial intelligence (AI) pioneer Nvidia is having an underwhelming 2026 so far despite delivering outstanding results quarter after quarter. Shares of the chipmaker have appreciated only 12% this year, well below the 74% jump in the PHLX Semiconductor Sector index.

However, shares of Lumentum Holdings (NASDAQ: LITE) and Applied Materials (NASDAQ: AMAT) have been flying high in 2026. While Lumentum has gained 121% this year, Applied Materials has jumped by an impressive 67%. Both companies have benefited from massive investments in AI infrastructure.

Lumentum Holdings reported a 72% year-over-year revenue increase to over $2 billion in the first nine months of fiscal 2026, with a revenue forecast of $985 million for the current quarter. Earnings per share surged 4.5x yearly to $5.27. The optical component market is expected to grow at an annual rate of 21% through 2029. Meanwhile, Applied Materials posted revenue of $7.91 billion in its second quarter of fiscal 2026, an 11% rise year-over-year, and anticipates $8.95 billion in revenue for the current quarter, forecasting earnings per share growth of 36%.