2026 Stock Market Surge: Why AI Energy and Infrastructure Plays Like Arista, First Solar Deserve Your Attention Now

The Perfect Storm for Equity Investors Heading Into 2026

Two powerful forces are aligning to reshape the investment landscape: accelerating AI-driven corporate profits and anticipated interest rate cuts. As we wrap up 2025, savvy investors are positioning themselves to capitalize on what could be a transformational year ahead. The stage is set for a significant market rally, and the entry points look compelling for quality names trading at attractive valuations.

Earnings momentum tells a compelling story. Wall Street forecasts S&P 500 earnings growth of 12.3% in fiscal 2026—up from 2025’s estimated 11.4%. Tech earnings outlooks have strengthened materially in recent months, fueled by massive capital deployment from AI leaders. Amazon, Microsoft, Alphabet, and Meta collectively plan to spend $400 billion on capex in 2025 alone—a stunning 300%+ jump from 2018 levels. These AI hyperscalers won’t slow down in 2026.

The scale is almost incomprehensible: global companies will invest approximately $7 trillion in data center infrastructure capex through 2030. This AI supercycle shows no signs of moderating, creating unprecedented opportunity across the entire ecosystem—from hardware to energy to networking infrastructure.

First Solar: The Hidden Winner in AI’s Energy Arms Race

First Solar represents a unique opportunity at an inflection point. As the only U.S.-headquartered company among the world’s ten largest solar manufacturers (and notably absent from China-based production), FSLR is positioned to capture enormous demand as America reshores critical energy infrastructure.

Here’s the economic reality: solar energy captured over 50% of new U.S. utility-scale generation capacity additions in 2025, demolishing battery storage (29%), wind (12%), and natural gas (7%). Meanwhile, nuclear projects won’t break ground until the early 2030s. Solar fills the immediate gap as data center operators race to power AI infrastructure at scale.

Amazon, Microsoft, and other AI giants committed to massive solar deployment in 2025. First Solar’s Arizona operations are expanding rapidly across Alabama, Louisiana, and additional domestic footprints—all underpinned by a rock-solid balance sheet ($13.5 billion in assets against just $4.4 billion in liabilities) and an impressive 53.7 GW booking backlog through 2030.

The numbers are striking:

• Revenue growth: 22% expansion projected for both FY25 and FY26, reaching $6.27 billion (versus $4.21 billion in 2024)
• Earnings power: Adjusted EPS surging 22% in 2025 and 59% in 2026 to $23.30 per share (nearly doubling 2024’s $12.02)
• Valuation advantage: Trading at 11.1X forward earnings—45% below median, 53% below the S&P 500, and 38% under the solar industry

FSLR’s 305% performance over the past decade handily beat the S&P 500’s 260%, yet the stock trades roughly 12% below its 2024 highs. Wall Street sees it too—24 of 33 brokerage ratings are “Strong Buys.” The stage appears set for a potential breakout into new trading ranges as the AI energy supercycle gains traction.

Arista Networks: The AI Infrastructure Pick That Connects the Dots

If energy powers AI operations, Arista Networks builds the nervous system. This large-cap networking powerhouse operates in the critical infrastructure layer, working directly with Microsoft, Meta, and other hyperscalers to provide the “plumbing” that keeps data centers humming.

Arista’s client roster speaks volumes—when Microsoft and Meta are among your largest customers, your competitive moat is world-class. ANET supplies networking infrastructure for AI data centers, cloud environments, and routing operations. Over the past decade, its revenue trajectory tells the growth story: from $361 million in 2013 to $7 billion in 2024, representing 32% average sales growth over the trailing four years.

The growth hasn’t peaked. Projections show:

• Revenue expansion: 27% growth in FY25 and 21% in FY26, reaching $10.73 billion (more than doubling 2022-2026 levels)
• Earnings acceleration: 27% and 15% adjusted earnings growth in those same years
• EPS trajectory: Path to approximately $4 per share by 2028 (from $2.27 in 2025)

What’s particularly impressive: Arista maintains a fortress balance sheet with $10.1 billion in cash and zero debt—providing substantial firepower for expansion. The company’s stellar operational execution has driven consistent upward earnings revisions, a pattern that typically precedes significant outperformance.

Despite skyrocketing roughly 2,800% over the past decade (outpacing five of the Magnificent 7 and nearly matching Tesla), Arista trades 20% below all-time highs and 33% below the average Zacks price target. It found support near its 200-day moving average heading into the holiday season. Once the stock clears early 2025 resistance levels, a move toward and potentially beyond all-time highs looks increasingly probable.

Why These Two Stand Out

Both First Solar and Arista Networks share critical characteristics: they benefit directly from the AI capex supercycle, trade at valuations that offer meaningful margin of safety, and offer multi-year runways for earnings expansion. The combination of improving macro conditions (stronger earnings growth, lower rates) and compelling micro fundamentals (market share gains, margin expansion) creates a rare opportunity set.

For investors closing out 2025 and positioning for 2026, quality names at reasonable prices in secular growth categories represent exactly where opportunity lies. These two merit serious consideration.