The results of the recent U.S. midterm elections have rocked equity markets. Artificial intelligence (AI) stocks are being particularly affected, since voters overwhelmingly adopted measures that could lead to more restrictions on data center expansion. That’s bad news for many AI leaders, but despite this setback, my view is that the AI industry will continue to expand over the long run.
Let’s consider three stocks that could be great buys following post-election dips: Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), and Microsoft(NASDAQ:MSFT). All three may still beat the market over the next five years. Here’s why.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger.Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout.Continue »
1. Apple
Apple operates its own data centers to support its digital services. However, the company hasn’t poured nearly as much money into data center construction as some of its similarly sized tech peers racing to meet the massive demand for AI services. What’s more, Apple has outsourced some cloud computing workloads to third-party providers. In other words, the company is somewhat less exposed to the risk that increased regulatory scrutiny will lead to a slowdown in the construction of data centers than many of its peers.
Meanwhile, the company’s financial results remain pretty strong, as the latest iPhone continues to drive a strong renewal cycle. During Apple’s fourth quarter of 2026, for the period ended Sept. 26, Apple reported $114.5 billion in sales, up 12% year over year. Apple has now recorded double-digit sales growth for four consecutive quarters, after spending a long time in single digits.
Apple could continue to perform well over the next year or two, especially as the recently launched iPhone Duo, the company’s first foldable smartphone, has been a hit so far. Over the long run, expect Apple to continue expanding its installed base, growing its subscription revenue, and posting consistent revenue and earnings growth.
2. Alphabet
The regulatory impact of the midterm elections could weigh on Alphabet, one of the biggest hyperscalers. The company is pouring significant sums into its AI-related ambitions, so much so that its free cash flow has turned negative in the past two quarters. The tech leader’s plans may have to be scaled back if lawmakers crack down on data center expansion.
