Artificial intelligence (AI) has been a tsunami propelling many tech shares skyward in recent times, together with Microsoft(NASDAQ: MSFT), Meta Platforms(NASDAQ: META), and, after all, Nvidia(NASDAQ: NVDA). The image has modified in 2026.
AI is now not seen because the tide that raises all boats. There can be losers within the synthetic intelligence period, inflicting many shares to fall throughout industries equivalent to cybersecurity and software-as-a-service. On prime of that, Wall Street is questioning the justification for enormous capital expenditures by tech firms.
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Consequently, shares of Nvidia are down about 7% in 2026 by way of the week ending March 20, whereas Meta fell 10%, and Microsoft dropped a staggering 21% in that point. Given the shifting AI present, what technique ought to traders contemplate? As a shareholder in Microsoft, Meta, and Nvidia, here is my plan for navigating these holdings.
Image supply: Getty Images.
I invested in Microsoft, Meta, and Nvidia primarily based on the assumption that these firms will ship wonderful returns over the long term. I nonetheless imagine so regardless of Wall Street souring on the shares in early 2026.
In the face of declining share costs, my technique is to take care of my holdings and, due to its massive drop, purchase more Microsoft. Many causes exist for this strategy. Let’s begin with why Microsoft inventory is a purchase.
Wall Street turned disgruntled with the tech conglomerate for components equivalent to its capital expenditures (capex). Microsoft introduced capex of $37.5 billion in its fiscal second quarter, ended Dec. 31, a staggering 66% year-over-year improve. About two-thirds of the fee went to {hardware} to help AI, such because the graphics processing items (GPUs) bought by the likes of Nvidia.
I see the capex price as a key funding in Microsoft’s future development. The spending is meant to develop its cloud computing capability, which is required to fulfill buyer demand for AI. This demand is illustrated within the 110% year-over-year development to $625 billion in Microsoft’s Q2 remaining performance obligations amongst business prospects.
The tech titan is a purchase as a result of its share worth valuation is at a low level for this previous yr, as illustrated by its price-to-earnings (P/E) ratio of 23.
Microsoft posted fiscal Q2 2026 gross sales of $81.3 billion, up 17% yr over yr, with its cloud computing income contributing 51.5 billion. This suggests its AI enterprise is doing properly, and with its drop in valuation, now is an effective time to choose up shares.
Wall Street’s issues over Microsoft’s capex prices are mirrored on the patron facet by Meta. The social media big forecasted its capex to succeed in between $115 billion and $135 billion in 2026, up from $72.2 billion in 2025.
Like Microsoft, Meta is investing to seize AI demand, as CEO Mark Zuckerberg expressed by stating, “We are now seeing a major AI acceleration. I expect 2026 to be a year where this wave accelerates even further on several fronts.”
Meta’s fourth-quarter outcomes are proof of its dominance. This autumn income rose a powerful 24% yr over yr to $59.9 billion, helped by development in each every day lively customers and the typical worth per advert.
The firm sees AI because the means to have interaction its viewers additional by routinely creating content material personalised to every person. As individuals spend extra time on Meta apps, this interprets into larger promoting income for the corporate. Anytime a person engages with or shares an advert, Meta makes cash.
With its enterprise performing properly and AI poised to drive additional development, Meta is a inventory to maintain.
Perhaps no inventory excites me greater than Nvidia. Its visionary founder and CEO, Jensen Huang, has appropriately predicted the computing business’s evolution and created merchandise to fulfill future wants, beginning with GPUs, the pc chips powering AI.
Huang believed GPUs have been ideally suited for synthetic intelligence and hand-delivered the world’s first AI supercomputer to OpenAI. He anticipated the rise of AI factories as a part of a brand new Industrial Revolution. The capex spending by Microsoft and Meta demonstrates that this prediction has come to move.
Now, Huang forecasts AI inference, the method the place software program makes choices, will function the following tech tidal wave. For applied sciences equivalent to self-driving vehicles and robotic surgeons to exist, the AI working these machines should execute inference on the fly.
To facilitate this, Nvidia’s newest GPU, Vera Rubin, is designed particularly for inference. It permits for self-evolving AI brokers to function independently.
Customers are already shopping for. Huang estimated orders for Nvidia GPUs will attain $1 trillion by the tip of 2027. This suggests the AI inference period could possibly be larger than the gross sales Nvidia is already producing. Revenue for its 2026 fiscal yr, ended Jan. 25, got here in at an all-time excessive of $215.9 billion, a considerable bounce up from the earlier yr’s document $130.5 billion.
But Wall Street was downbeat on Nvidia inventory. AI tech is evolving so quick that predicting future AI winners and losers is tough, therefore the sell-off in sectors equivalent to cybersecurity.
Even so, I’ve realized it is unwise to guess in opposition to Huang’s computing business insights. That’s why Nvidia is a inventory to purchase and maintain for the long run because the AI tidal wave continues to rise.
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Robert Izquierdo has positions in Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
