Amazon and AI-Driven Tech Stocks Poised for 2026 Growth: Undervalued Infrastructure Leaders in the Agentic AI Era

The AI revolution is accelerating, and 2026 marks a pivotal year for infrastructure leaders poised to capitalize on the compounding effects of agentic AI adoption. As enterprises and governments scale their AI ambitions, the demand for high-performance computing, custom silicon, and robust networking solutions is surging. Bank of America's strategic picks-Nvidia, Broadcom, and Amazon-stand out as undervalued champions of this transformation, with their financials and partnerships underscoring their long-term dominance.

Amazon: The Unstoppable Force in AI Infrastructure

Amazon's Amazon Web Services (AWS) remains the bedrock of global cloud computing, accounting for 66% of the company's total operating profits in 2025. With a 34.6% profit margin and a 20% year-over-year revenue increase in Q3 2025, AWS is not just a cash cow but a catalyst for AI innovation. The division's capital expenditures, which reached $115.9 billion in Q3 2025, reflect its aggressive expansion to meet surging demand for AI workloads.

A critical differentiator is Amazon's development of custom AI chips. The Trainium3 AI accelerator, designed for machine learning training and inference, reduces costs by up to 40% compared to third-party solutions like Nvidia's. This self-reliance in silicon design mirrors the strategies of Apple and Microsoft, enabling Amazon to optimize performance while cutting dependency on external suppliers.

Strategic partnerships further solidify Amazon's position. A $38 billion cloud computing deal with OpenAI and a $50 billion investment to expand AI infrastructure for U.S. government customers highlight its role in powering high-stakes AI applications-from defense simulations to large-scale data analytics. These contracts not only diversify revenue streams but also lock in long-term demand for AWS's AI-optimized infrastructure.

Broadcom: The Hidden Gem in AI Semiconductors

While Nvidia dominates headlines, Broadcom (AVGO) is quietly emerging as a cornerstone of the AI infrastructure stack. The company's AI semiconductor revenue hit $6.5 billion in fiscal Q4 2025, growing at a staggering 74% year-over-year rate. Bank of America values Broadcom at 33 times its anticipated 2026 earnings and projects a stock price of up to $500 per share, citing its profitability and free cash flow generation.

Broadcom's strategic partnerships are equally compelling. A multi-year collaboration with OpenAI, announced in October 2025, will deploy custom AI accelerators and Ethernet solutions starting in late 2026. This deal, valued at over $10 billion, underscores Broadcom's ability to deliver end-to-end solutions for AI data centers. Meanwhile, its collaboration with Amazon to develop custom AI ASICs positions it as a critical supplier for hyperscalers seeking to reduce costs and enhance performance.

Nvidia and the AI Ecosystem

Nvidia, the undisputed leader in AI chips, remains a top pick for 2026 due to its dominance in the AI stack. Bank of America's Vivek Arya highlights Nvidia's ability to optimize the entire AI ecosystem, from GPUs to software frameworks. With data-center capital expenditures outpacing other sectors, Nvidia's GPUs are indispensable for training large language models and deploying agentic AI systems.

However, the competitive landscape is evolving. As hyperscalers like Amazon and Microsoft develop custom silicon, Nvidia faces margin pressures. Yet, its partnerships with OpenAI, Anthropic, and others ensure its relevance in a fragmented market. For investors, Nvidia's valuation-despite recent gains-remains justified by its recurring revenue model and technological moats.

The Long-Term Case for AI Infrastructure

The compounding effects of AI adoption are reshaping global markets. Bank of America projects AI-related capital expenditures will reach $1.2 trillion by 2030, with infrastructure leaders capturing the lion's share. Amazon's low price-to-sales ratio, Broadcom's robust free cash flow, and Nvidia's ecosystem dominance create a compelling trifecta for 2026.

For undervalued infrastructure leaders, the path to growth is clear:
1. Amazon benefits from AWS's expanding AI footprint and strategic partnerships.
2. Broadcom leverages its semiconductor expertise to meet surging demand for custom silicon.
3. Nvidia maintains its edge through innovation and ecosystem integration.

Conclusion: Positioning for 2026

As the agentic AI era unfolds, infrastructure stocks are the bedrock of long-term value creation. Amazon's AWS, Broadcom's semiconductors, and Nvidia's GPUs form a resilient portfolio for investors seeking exposure to the AI boom. With AI investment in a mid-cycle phase and valuations still attractive, 2026 presents a rare opportunity to capitalize on the next phase of the AI revolution.