AI Stocks To Watch: Cybersecurity's RSA On Tap, 'Death Cross' In The Making?

With the first quarter of 2026 nearly over, many of the leading artificial intelligence stocks from last year have turned into laggards. Bellwether Nvidia (NVDA) stock has disappointed. But there have been bright spots.

The top AI stocks in 2026 have been optical networking plays such as Lumentum Holdings (LITE) and** Ciena** (CIEN) and data center firm Vertive Holdings (VRT). Also posting strong gains have been new AI infrastructure, cloud players CoreWeave (CRWV) and** Nebius Group** (NBIS) despite lingering worries over their debt.

What’s clear is that expectations remain high for AI stocks. AI monetization and return on investment remains key for investors amid worries over an AI bubble.

Nvidia stock failed to get a lift from the annual GTC, an event where the company unveils long-term technology roadmaps. Nor did memory chip maker Micron Technology (MU) get a boost despite posting strong fiscal Q2 earnings, with guidance far ahead of the Street.

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AT GTC, Nvidia forecast cumulative AI processor sales from 2025 through 2027 of “at least $1 trillion,” excluding new Groq inferencing chips and other products.

Nvidia updated its AI data center networking outlook. It expects copper and optical technologies to co-exist. But optical will take over eventually. Nvidia’s “Feynman” AI chip, due in late 2028, will be primed for optical networking devices.

From a technical view, Nvidia stock last week fell below its 200-day moving average for the first time since May, 2025. The Nasdaq also dipped below its 200-day line along with other major indices. Nvidia stock has retreated 7% in 2026.

AI Stocks: RSA Conference Kicks Off

Investors should monitor whether the stock market’s 50-day moving average crosses below the 200-day moving average, an event called a “death cross” technical chart pattern. A death cross usually marks a loss of market momentum but isn’t always an ominous development despite the name. Still, it could signal a market roll-over or prolonged downturn.

Artificial intelligence — along with  “agentic” technology and vibe coding — is expected to be the big topic at the cybersecurity industry’s  RSA conference this week. The annual RSA conference focuses on technology and industry trends, including the threat landscape, company vulnerabilities and emerging technologies.

“AI is reshaping cybersecurity as both the primary threat vector and the most significant demand catalyst the industry has seen in years,” said Wedbush analyst Daniel Ives in a report.

Both hackers and computer security firms are putting new AI tolls to use. Meanwhile, shares in Palo Alto Networks (PANW), CrowdStrike Holdings (CRWD), Zscaler (ZS) and other cyber plays have under-performed in 2026 amid worries over competition from AI models.

AI Stocks: Software Takes Hit

The big picture: software AI stocks continue to get hammered. Adobe’s (ADBE) long-time CEO has stepped down.  The iShares Expanded Tech-Software Sector ETF, an industry index that includes many big-cap software companies, has dropped 21% in 2026.

Shares in Palantir Technologies (PLTR) are down 15% this year. Palantir stock gained 135% last year, 340% in 2024 and 167% in 2023.

The sell-off in software-as-a-service stocks continues, with Salesforce (CRM), Workday (WDAY), Atlassian (TEAM) and ServiceNow (NOW) among the losers.

Generally, there’s concern AI model builders OpenAI and Anthropic will emerge as competitors in the enterprise market. There’s growing investor angst over generative AI software coding tools and automated AI assistants, and how they might impact traditional software product growth and profit margins.

The IBD Methodology: How To Invest In Stocks While Managing Risks

One of the new AI buzzwords is “SaaS-pocalypse,” referring to the notion that AI agents will replace software-as-a-service companies. Investors in AI stocks may also want to be familiar with “outcome-based pricing,” a software revenue shift to agentic automated workflows from per-seat based business models.

AI Stocks: Hyperscalers Retreat

Then, there’s the “system of record” debate. That term refers to software companies like Salesforce (CRM) and ServiceNow that some analysts contend are better positioned to monetize AI because of their data troves.

For investors in software AI stocks, the biggest question is how “coopetition” between AI model builders and incumbent software firms will play out in the enterprise market.

Meanwhile, investors are scrutinizing capital spending hikes by hyperscalers — cloud computing giants that build massive data centers.  Shares in all the hyperscalers have under-performed in 2026 amid worries that they’re building too much AI infrastructure, too fast.

Four hyperscalers — Alphabet’s (GOOGL) Google, Amazon.com (AMZN), Meta Platforms (META) and Microsoft (MSFT) — are now expected to spend $645 billion in 2026, representing growth of 56% or $230 billion on a dollar basis. Google stock is down 4% this year while Meta has retreated 10%. Amazon stock has pulled back 11%. Microsoft stock is down 21%.

Big OpenAI Funding Round

Amid worries over an AI bubble, many AI stocks have retreated from 52-week or record highs. What’s clear is that investors need to be picky when looking at semiconductor, software and other plays. For many companies — Google, Facebook parent Meta and Microsoft among them — the rise of generative AI poses both risk and opportunity.

See The Latest Updates To IBD Watchlists

Many companies suddenly tout AI product roadmaps. In general, look for artificial intelligence stocks that use artificial intelligence to improve products or gain a strategic edge.

Meanwhile, OpenAI closed a funding round that raised over $100 billion from investors including Amazon, Softbank and Nvidia. It remains to be seen whether the new funding round quashes worries that the ChatGPT builder won’t live up to huge data center build-out commitments.

Further, Microsoft still holds the biggest stake in OpenAI at around 27%, followed by Softbank at roughly 12% to 14%.

2026 AI Stocks Scorecard

Reasons To Worry About AI Bubble

One reason the artificial intelligence stocks trade has faltered is investor concern over some tech companies adding massive debt to fund data center infrastructure buildouts.

Other investor concerns over an AI bubble include the securitization of loans to data center infrastructure builders as well as the growing “circularity” in the AI ecosystem, which blends investments with commercial relationships.

Yet another worry is that costly AI data center infrastructure depreciates over time from an accounting point of view. That impacts earnings.

Finally, there’s the enormous power needs of AI data centers. There’s mounting concern over the U.S. electrical grid lagging China’s amid massive data center buildouts. Also, some lawmakers are raising alarms over rising electricity prices for consumers.

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Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, quantum computing, cybersecurity and cloud computing.

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