The AI Supercycle Isn't Slowing Down -- It Just Shifted. These 2 Stocks Are Riding the Next Wave.
The AI Supercycle Isn't Slowing Down -- It Just Shifted. These 2 Stocks Are Riding the Next Wave.
Harsh Chauhan, The Motley FoolTue, April 28, 2026 at 10:50 PM UTC
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Key Points -
Physical AI and agentic AI applications are poised to witness significant acceleration in the long run.
Nvidia and Palantir Technologies are already making solid progress in these markets, putting them on track to win big from these lucrative growth opportunities.
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Artificial intelligence (AI) has attracted massive investments in recent years, and demand for this technology remains insatiable three and a half years after it became popular following the launch of OpenAI's ChatGPT.
That's evident from the huge backlogs that companies selling AI software are sitting on, as well as the multiyear shortage of components such as memory chips and AI data center accelerators. So, it can be said that the AI supercycle isn't showing any signs of slowing down. However, the World Economic Forum noted in January this year that the next phase of the AI supercycle will be driven by physical AI, agentic AI, inference, and connectivity applications, among other things.
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Let's take a look at two AI stocks that can help you capitalize on the next phase of the AI supercycle.
A robotic arm in a factory.
Image source: Nvidia.
Nvidia: Taking the lead in physical AI
Physical AI refers to the integration of AI into physical elements, such as robots, vehicles, and drones. The addition of AI to these hardware elements enables them to navigate real-world environments and make decisions independently.
Nvidia (NASDAQ: NVDA) has already started making a dent in this market. Management noted on the company's February earnings call that physical AI contributed over $6 billion to its revenue in the previous fiscal year. The semiconductor giant believes that physical AI solutions could become a major driver of its revenue in the long run, adding "hundreds of billions of dollars" to its top line.
Nvidia is collaborating with several companies, including Alphabet's Waymo, Uber, and Tesla, to develop robotaxi solutions. Additionally, it is developing autonomous robots for industrial purposes in association with companies such as Caterpillar, LG Electronics, and Boston Dynamics.
Nvidia's early move in this market could reap rich rewards in the long run. That's because the physical AI market is expected to reach a whopping $3.25 trillion by 2040. Nvidia could therefore be scratching the surface of a massive opportunity that could help it sustain its terrific growth for years to come.
The company generated nearly $216 billion in revenue last year, and the potential opportunity in the physical AI market indicates that it could witness a serious jump in that number in the long run. So, investors can consider buying and holding Nvidia stock for the long run, as its impressive growth momentum seems far from over.
Palantir Technologies: Pushing the envelope in agentic AI
Agentic AI is expected to become another big niche within AI in the coming years. Agentic AI systems can make decisions autonomously by analyzing problems and executing complex tasks. Consulting giant Boston Consulting Group expects agentic AI solutions to enhance productivity by 30% to 40% in enterprises.
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The agentic AI market is poised to grow at an annual rate of 46% through 2030, generating almost $53 billion in revenue by the end of the decade. Palantir Technologies (NASDAQ: PLTR) helps enterprises and governments build agents using its Artificial Intelligence Platform (AIP), allowing investors to capitalize on this fast-growing opportunity.
The company was ranked as the No. 1 vendor of agentic AI solutions by analytics provider Dresner Advisory Services last year. The company has been attracting new customers at a nice pace and extracting more business from existing customers. This has allowed Palantir to build a significant revenue backlog, as it is landing new contracts at a much faster pace than it generates revenue.
Palantir signed $4.3 billion worth of contracts in the fourth quarter of 2025, a jump of 138% from the prior year. That significantly exceeded its quarterly revenue growth of 70% to $1.4 billion. As the agentic AI market grows and more companies flock toward its AIP agent solutions, its revenue pipeline and growth should pick up.
Palantir stock could become a major beneficiary of the secular growth of the agentic AI market in the long run. Importantly, this niche could unlock a major growth opportunity for the company, helping it significantly increase revenue and generate more upside for investors.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Caterpillar, Nvidia, Palantir Technologies, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.
Source: “AOL Money”
