Artificial intelligence (AI) continues to be the driving force behind the broader stock market’s gains in 2026, even though the sector has experienced volatility this year for various reasons.
The Global X Artificial Intelligence & Technology ETF, an exchange-traded fund that invests in companies benefiting from the proliferation of AI, has clocked 23% gains this year. The fund invests in companies that integrate AI into their operations or sell AI-focused hardware and software.
The tech-focused Nasdaq Composite index, for comparison, has appreciated 13% in 2026. Bank of America analyst Vivek Arya believes that the build-out of AI infrastructure will continue to be a driving force for the stock market for the rest of the year. AI stocks such as Micron Technology, Advanced Micro Devices, and Sandisk shot up remarkably in the first half as they benefited from component shortages and terrific demand.
Arya estimates that the trend will continue in the second half. That’s why we are going to take a closer look at Nvidia (NVDA +3.90%) and Celestica (CLS +1.60%), two attractively valued AI stocks that are having a difficult year but can step on the gas this earnings season.
Image source: Nvidia.
Nvidia has been underperforming this year, but that could soon be a thing of the past
With gains of just 11% in 2026, Nvidia is having a forgettable year. However, it may not take long for this AI pioneer to start soaring, and the upcoming earnings season could provide it with a much-needed catalyst.
Today’s Change
(3.90%) $7.90
Current Price
$210.68
Key Data Points
Market Cap
Day’s Range
$201.91 – $210.87
52wk Range
$162.02 – $236.54
Volume
5.7M
Avg Vol
158.9M
Gross Margin
74.15%
Dividend Yield
0.13%
Nvidia is one of the biggest beneficiaries of the enormous spending on AI data centers. According to one estimate, the company is the dominant AI chip designer with an estimated market share of 80% to 90%. It counts major hyperscalers and AI labs as customers, which is why the increasing AI infrastructure investments will continue to fuel tremendous growth for the company.
Major hyperscalers noted during the previous earnings season that their capital expenditure for 2026 will increase substantially. Alphabet, Amazon, Meta Platforms, and Microsoft‘s collective capex in 2026 is poised to jump by 77% to a record $725 billion, according to the Financial Times. That’s well above the $500 billion estimate that analysts were originally expecting for this year.
Don’t be surprised to see these companies further raise their capex guidance this earnings season, as they scramble to meet the huge contractual backlogs they are sitting on. According to one estimate, the combined contractual backlog of Google, Microsoft, Amazon, and Oracle is at a whopping $2.1 trillion. As a result, these companies could build data centers at a faster pace, thereby boosting demand for Nvidia’s systems.
It is worth noting that analysts have been becoming bullish about Nvidia’s growth prospects, encouraged by the healthy capex environment.
Data by YCharts
Nvidia’s earnings per share were $4.77 in fiscal 2026 (which ended in January this year). So, the company’s earnings are on track to clock a compound annual growth rate of 50% over the next three years, based on consensus estimates seen in the chart above. Such strong earnings growth is likely to be rewarded with a premium valuation compared to Nvidia’s forward earnings multiple of 23.
Assuming Nvidia stock trades at even 30 times earnings (a slight premium to the Nasdaq-100’s forward earnings multiple of 27) at the end of fiscal 2029 and generates $16.15 in earnings per share, its stock price could reach $484 in under three years. That’s a potential jump of 129% from current levels, which is why it would be a smart idea to buy Nvidia’s shares before the earnings season kicks off, as strong capex forecasts from its customers could supercharge the stock.
Celestica’s latest pullback makes it a no-brainer buy
Electronics manufacturing services provider Celestica reached a 52-week high in early June, but has pulled back nearly 24% since then. This allows investors to buy a fast-growing stock at an attractive valuation.
Today’s Change
(1.60%) $5.68
Current Price
$360.46
Key Data Points
Market Cap
Day’s Range
$347.41 – $361.59
52wk Range
$153.11 – $474.02
Volume
32.2K
Avg Vol
2.2M
Gross Margin
11.51%
The AI infrastructure build-out has supercharged Celestica’s connectivity and cloud solutions (CCS) business. The company manufactures networking switches and custom AI processors for hyperscalers and chip designers, such as Broadcom, which explains why it has been enjoying solid growth lately.
The company’s Q1 revenue increased by 53% year over year to $4.05 billion. Its Q2 guidance of $4.3 billion points to a 49% year-over-year increase. Importantly, Celestica’s solid top-line growth is leading to an acceleration in the bottom line as well. Its adjusted earnings increased by 80% year over year in Q1, and the Q2 guidance suggests a 61% jump at the midpoint.
As Celestica supports the build-out of AI data centers, there is a strong chance the company will sustain its robust earnings growth. Consensus estimates project a 70% increase in its earnings per share in 2026 to $10.29, followed by healthy jumps over the next couple of years.
Data by YCharts
The stock is trading at 35 times forward earnings following its recent pullback. Assuming it trades at 30 times earnings after three years and its earnings per share reach $18.95, its stock price could jump to $568. That’s a potential jump of 58%. So, investors can consider capitalizing on the recent pullback in Celestica stock to buy more shares, as it could step on the gas once it reports its Q2 earnings later this month.
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