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Needham's Laura Martin sees Amazon (AMZN) stock as undervalued, driven by strong AI adoption, expanding margins, and cloud leadership.
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Headwinds For The AI Trade Please click here for an enlarged chart of NVIDIA Corp (NASDAQ:NVDA). Note the following: This article is about the big picture, not an individual stock. The chart of NVDA stock
The article compares two specialized hardware companies: Cerebras Systems, which builds AI-accelerating wafer-scale processors and recently achieved profitability with $510M revenue but faces competitive pressure from Nvidia; and IonQ, a quantum computing leader with 202% revenue growth to $130M but still unprofitable with $510M net losses. The author recommends IonQ for 2026 due to its diversified customer base, expanding backlog, and fewer near-term competitive concerns, despite both being speculative early-stage investments.
Nine of 11 sectors are higher in Friday's regular session, with the top three split across defensive, growth and cyclical groups. The leaders are separated rather than clustered, with no single gap clearly standing apart from the other breaks across the table.
The Magnificent Seven tech stocks (Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta, Tesla) offer significant AI and growth opportunities but face headwinds from massive capital expenditures exceeding $700 billion projected for 2026, weakening free cash flow across the group. While some stocks appear overvalued, ETFs provide diversified exposure to mitigate company-specific risks.
While IonQ and D-Wave are making technological progress in quantum computing, both remain unprofitable with unproven business models and face substantial dilution risks. Alphabet is presented as the superior long-term quantum computing investment, leveraging its existing AI ecosystem, cloud infrastructure, and proven business model to integrate quantum computing opportunities without relying solely on the technology's success.
Unity Software Inc. (NYSE: U) stock is rising on Friday following price target increases from three analysts, adding to momentum after a BTIG upgrade on Friday.