By Tae Kim
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Next Winners. Hi everyone. Longtime readers know I'm a big fan of the Dan Benton school of investing. Benton, who once ran the world's largest technology hedge fund, prioritized finding the best product cycles that can drive positive earnings surprises. When it comes to picking tech stocks, products can mean more than valuations.
So, I'm always looking for the next big product trend that will outperform the consensus. Based on that framework, my top three stock ideas for next year are Microsoft, Dell Technologies, and Nintendo.
I believe enterprise artificial-intelligence adoption, which is still in its infancy, will become more prominent in 2026 as corporations start to talk up their productivity gains. AI is a foundational technology every company will need to provide faster and more reliable service -- and to keep up with rivals. So far the evidence is showing up in coding, paperwork processing, and customer service, but I expect AI's benefits to become ubiquitous, and undeniable, in the next 12 months.
While it's faced some tough headlines of late, OpenAI remains a key driver of the trend, and it's underestimated in the enterprise space. On Monday, OpenAI said that more than one million businesses now use its AI tools and that it serves more than seven million ChatGPT workplace accounts.
OpenAI's latest models may have temporarily fallen behind Google Gemini and Anthropic Claude, but I expect ChatGPT to soundly regain its model leadership in the coming months. The reason why is simple: Recent progress from Gemini and Claude show that AI scaling laws are intact, which likely means that ChatGPT's next models will see their own big improvements, especially as the company trains its new models on the latest and most advanced Nvidia NVL72 superclusters next year.
So how do investors play OpenAI's rebound? By buying the recently underperforming shares of Microsoft. In October, Scott Guthrie, who runs Microsoft's cloud and AI group, told me that OpenAI is training its next models at the company's new data centers. He predicted that as the models get smarter, more use cases will appear and it would lead to an "explosion" of AI infrastructure usage at Azure, Microsoft's enterprise cloud.
As OpenAI makes progress and potentially goes public, Microsoft will also benefit from its 27% ownership stake in the start-up's public-benefit corporation, soaring demand for AI infrastructure services, and its intellectual property rights to OpenAI's technology.
Dell is also set to benefit as enterprises ramp up their AI hardware purchases. Dell has become a leading vendor of Nvidia AI servers to corporations, and the company has a large global distribution and services footprint. All of those factors have helped Dell win CoreWeave and Elon Musk's xAI as customers for their own AI buildouts.
Dell is also poised to benefit from an improving product cycle tied to PCs and servers. Companies are now refreshing their computers to make the move to current versions of Windows after Microsoft officially ended support for Windows 10 in October.
Fortunately technology is about more than just enterprise product cycles. There's fun to be had in there, and Nintendo has that category nailed down.
The videogame maker had a banner year in 2025. Its new Switch 2 console, which launched in June, has been a massive blockbuster, becoming the fastest-selling Nintendo console ever at launch. In November, the Japan-based videogame publisher raised its sales forecast for the console to 19 million units from 15 million units for the fiscal year ending in March. For context, the first Switch sold 15.05 million units in its first full fiscal year.
I predict Switch 2's second year will be even better as more games are released from its core franchises. Among the youngest generation, Nintendo has also become the next Walt Disney. It has dominated the box office and found success at several theme parks. Look for more buzz to build when the Super Mario Galaxy Movie is released in April.
Though Benton plays down valuation, Microsoft, Dell, and Nintendo come with the benefit of not being particularly expensive. Microsoft and Nintendo both trade at 28 times Wall Street's per-share earnings estimates for the next 12 months, while Dell trades at just 12 times.
All three stocks could benefit from a virtuous product cycle. Better-than-expected sales will drive earnings higher, which, in turn, could push the multiples to grow. It's an ideal combination for gains. Happy stock-picking everyone.
This Week in Barron's Tech
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Idea
-- Micron Stock Rises. Wall Street Is Feeling Good About Next Week's
Earnings.
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-- AI Stocks Are a Bet on the Future. Markets Are Ignoring the Now.
Write to Tae Kim at tae.kim@barrons.com or follow him on X at @firstadopter.
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December 10, 2025 16:46 ET (21:46 GMT)
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