Motley Fool Money
AI Investor Outlook for 2026 and Beyond
January 6, 2026
Host: Emily Flippin
Guests: Asit Sharma (Fool Analyst), Donato Riccio (Head of AI at The Motley Fool)

Episode Overview

This episode explores "The Motley Fool's 2026 AI Investor Outlook Report." Host Emily Flippin is joined by analyst Asit Sharma and AI chief Donato Riccio to dig into real-world sentiment on AI stocks, sift through ongoing hype and skepticism, and share practical frameworks and specific opportunities for investors interested in AI for 2026 and beyond.

Key Discussion Points & Insights

1. Current AI Investor Sentiment (00:00 – 06:14)

• Survey Findings: Out of 2,600 American adults surveyed:
  • 36% plan to increase AI holdings
  • 57% plan to hold steady
  • Only 7% plan to reduce
  • 62% have confidence in AI-heavy companies for long-term returns (93% among those already invested)
• Parsing the “Bubble” Narrative:
  • Asit Sharma notes that investors today have a much stronger technical vocabulary and understanding of AI compared to previous tech bubbles, such as dot-com or tulip mania.

    • "The mania aspect of this bubble appears comparatively smaller to me. ...Investors seem to me like they're in this mode of evaluating the risks, the trade offs, and they're more willing to demark their personal lines that go between investing and speculating." — Asit Sharma (03:11)

  • Flippin adds that increasing exposure could simply be investors building their target allocation.

2. Real-World AI Adoption & Healthy Hype (06:14 – 11:34)

• Matching Sentiment with Reality:
  • Riccio believes investor confidence is justified by enterprise adoption data.
  • Early 2025 saw overhyped expectations for "agents," but as reality caught up and hype cooled, a healthier balance emerged.

    • "The main indicator I monitor is pretty simple. Are people's expectations connected to how the technology actually works?" — Donato Riccio (06:29)

  • Adoption Data:
    • Paid AI adoption among U.S. businesses rose from 5% (2023) to 44% (September 2025).
    • Notable revenue growth in firms like Anthropic (10x revenue two years running) and Cursor (from $4M to $1B ARR in one year).

3. The “Cost Curve” and Where Value Will Accrue (10:51 – 14:39)

• AI’s Rapidly Falling Costs:
  • Intelligence-per-dollar is doubling every six months.
  • Example: GPT-4 cost $30–$60 per million tokens (2024), GPT-5 Mini is $2 per million tokens (2026)—15–30x cheaper, plus more capable.

    • "The models got around 15 to 30 times cheaper for more intelligence in just two years. That's what we call the intelligence per dollar curve." — Donato Riccio (12:29)

  • The bottleneck for further AI impact is no longer intelligence, but how companies can harness and deploy this rapidly advancing, cheap technology.

4. Practical Investing Frameworks for AI (14:39 – 17:20)

• Riccio’s Three Investment Filters:
  1. Solving a Real Problem: Is AI being used where it's needed, or just for hype?
  2. Production vs. Prototype: Is the capability in real-world use, or just in demo stages?
  3. Data Advantage: Does the company use proprietary data, or just generic, commodity models?

  • "If a company is having an AI announcement just to have an AI announcement, I'd be skeptical... The differentiation lies in the data and in the specific company context." — Donato Riccio (15:13)

• Boring Is Good: Some of the best applications of AI could be internally applied use cases that improve productivity but aren't flashy; these compound over time.

5. Opportunities Beyond “Big Tech” (19:25 – 24:28)

• Asit Sharma’s Focus: AI Infrastructure & Ecosystem:
  • Key Areas:
    • Data interconnect specialists (help with fast data transfer within data centers)
      • Example: Astera Labs (ALAB)
    • High-bandwidth memory providers (relieving GPU bottlenecks)
      • Example: Micron Technology (MU)
    • Cutting-edge data storage designers (fast, cost-efficient storage for AI workloads)
      • Example: Pure Storage (PSTG)
    • Nicknames these types of stocks as opportunities that are less flashy and more foundational to the AI boom.

      • "This is the type of boring thing that Donato talks about...they're doing really simple stuff at a high level, at a complex level." — Asit Sharma (20:25)

    • Notes that big names like Nvidia (NVDA), AMD (AMD), Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOG) remain important, but value is also found in the supply chain and ecosystem.
  • Risks:
    • Elevated valuations, acute supply shortages; investors should size positions carefully.

6. Risk Management & Investing Discipline (24:28 – 26:27)

• Asit’s Rules:
  • Stay invested in sector leaders, but avoid concentration—especially in infrastructure players with limited customer bases.
  • New positions in speculative or niche companies come in small allocations (0.5%–1% of portfolio).
  • Explore value chains outside comfort zones—construction and industrials serving the AI data center build-out, for example, had banner years in 2025.

    • "The breadth of the AI trade and the opportunity both are very wide. But you have to be willing to turn over some new stones to benefit I think in 2026 and beyond." — Asit Sharma (26:16)

Notable Quotes & Moments

• On the Bubble Debate:

  • "The mania aspect of this bubble appears comparatively smaller to me. ...investors seem to me like they're in this mode of evaluating the risks, the trade offs, and they're more willing to demark their personal lines that go between investing and speculating." — Asit Sharma (03:11)

• Technical Progress & Commoditization:

  • "The models got around 15 to 30 times cheaper for more intelligence in just two years." — Donato Riccio (12:29)
  • "We don't even know how to use the intelligence we already have right now. And most companies are really still experimenting." — Donato Riccio (13:39)

• What to Look For as AI Investor:

  • "If a company is having an AI announcement just to have an AI announcement, I'd be skeptical." — Donato Riccio (15:13)
  • "The best AI investments sometimes just look boring. ...Those companies compound on the long term." — Donato Riccio (16:54)

• On Risk & Opportunity:

  • "Much of the value is sort of priced in [to the big AI companies]... So investors are naturally looking now to suppliers within the spectrum of the value chain that exists between your keyboard... and your screen where you get the response back from ChatGPT. So what happens in between? It's not all about the GPU makers." — Asit Sharma (22:59)
  • "I position size accordingly because there are so many concentrations. ...If I enter a new position of a company, it comes in somewhere at a half percent or percent of my total performance portfolio, even sometimes a little bit less." — Asit Sharma (25:13)

Timestamps for Critical Segments

• [00:00] – Survey overview & investing sentiment
• [02:17] – Is this a bubble or are investors well-informed?
• [06:14] – Real-world adoption and progress on “AI agents”
• [11:34] – Cost curves, falling model prices, and the future of value
• [14:39] – Riccio’s framework for evaluating AI investments
• [19:25] – Sharma on overlooked AI infrastructure opportunities
• [24:28] – Practical risk management & portfolio discipline

Summary

This episode presents a nuanced discussion showing that while AI investing is still hot, today’s investors are much better informed and realistic about risk and value than in past bubbles. Analyst Asit Sharma and Head of AI Donato Riccio lay out evidence that real-world adoption and cost deflation support further growth in the sector—even if hype levels ebb and flow. A practical investment approach should focus on fundamentals: companies creating or deploying AI in ways that are difficult for rivals to copy, with real-world applications generating results. There’s opportunity beyond megacaps, especially among “boring” players in the data center and semiconductor ecosystem. Yet, risks remain and a disciplined, diversified, and cautious allocation is advised. Investors are encouraged to look past the latest AI headline and to consider where value will accrue as the cost of intelligence trends towards zero.

For deeper insights, listeners are invited to access the full report at fool.com/research/AI-investor-outlook.