Amazon (AMZN), Google (GOOGL), Meta (META), and Microsoft (MSFT) remain the four mega-cap leaders in the AI race, and Northland Capital Markets said they could keep driving the boom well into 2027. Despite growing talk of an AI bubble, the firm’s top analyst, Gus Richard, expects at least 18 more months of strong spending before any real slowdown begins.
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It is worth noting that Richard ranks 199 out of more than 10,000 analysts tracked by TipRanks. He has a success rate of 60%, with an average return per rating of 20.20% over a one-year timeframe.
AI Spending Still Looks Strong
Richard said the AI cycle is “in its 7th inning,” but nowhere near the end. He expects spending to stay firm through 2026 as major cloud companies continue to add data center capacity. Northland also noted that chipmakers now have demand visibility through mid-2027, which is rare for such a fast-moving part of tech.
Even if U.S. power shortages delay some projects next year, the firm believes government-backed AI programs overseas will help keep overall demand steady.
A Possible Slowdown After 2027
Northland sees the real risk starting in mid-2027, when tighter budgets and electricity shortages could begin to weigh on new AI builds. The report warned that this may spark a multi-year slowdown after several years of rapid expansion.
Geopolitics could add more pressure. Northland said new rules after the U.S. mid-term elections may limit global sales of advanced AI chips. Combined with supply bottlenecks, this could result in a two- to three-year pause before growth picks up again.
Which Stocks Could Win — and Which May Struggle
Northland said Amazon, Google, Meta, and Microsoft remain the best-positioned. These companies have the scale to keep investing in AI even if conditions get tougher. The firm also highlighted companies tied to AI interconnect hardware as long-term beneficiaries.
On the weaker side, the analyst said companies tied too closely to OpenAI or Oracle (ORCL) may lag, and believes Advanced Micro Devices (AMD) could be one of them.
Northland also sees a new growth wave forming in edge AI — the AI used in wearables, cameras, and small devices. The firm expects this segment to pick up speed in 2026, with Synaptics (SYNA) and Ambarella (AMBA) well positioned to benefit.
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