In 2025, AI stocks saw a strong performance, with a basket of AI names rising by 50.8%, outperforming the overall stock market and the tech sector. Among the best performers were Micron and Lam Research, benefiting from surging memory prices due to AI infrastructure demand.

However, in the fourth quarter, stocks like Oracle and Nvidia faced challenges, with Oracle losing 30.5% due to concerns about its AI strategy. Despite this, AI stocks as a group managed to outperform the broader market, with semiconductor companies SK Hynix and Micron leading the way with over 70% gains.

The Morningstar AI basket consists of 34 stocks across the AI value chain, including hardware firms, hyperscalers like Amazon and Alphabet, and select software companies like Salesforce. These stocks are currently trading within fair value, with opportunities for investors to consider.

Looking ahead to 2026, analysts expect continued growth in AI stocks, with companies like Palantir leading the charge with a 135% gain in 2025. Despite concerns about overvaluation, the future of AI stocks remains promising for investors willing to navigate the volatility in the market. AI stocks outperformed the US market and tech sector in Q4, despite volatility. Oracle and Nvidia struggled amid AI bubble fears. Most AI stocks are fairly valued, with some exceptions. The group rebounded in Q3, ending with a 13% premium.

Marvell is a top semiconductor pick for 2026, trading 30% below fair value. Adobe ended 39% undervalued, while Salesforce was 20% undervalued. This news was reviewed by Morningstar editors and generated with automation. Learn more about Morningstar’s use of automation.

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AI stocks outperformed the US market and tech sector in Q4, despite Oracle and Nvidia struggling due to AI bubble fears. Morningstar UK reports that AI stocks are fairly valued, with some exceptions showing attractive prospects.: AI Stocks: Winners, Laggards, and Losers of 2025