Buy, hold or sell? Here are my latest views on big tech stocks

The tech juggernaut has hit a wall. So far in this quarter, the S&P 500 Information Technology Index (SRIT) has gained only 4.22 per cent, as of Sept. 18. Compare that to the one-year gain of 29.69 per cent to the same date and the extent of the 2026 slowdown is clear.

Part of the reason may be profit taking after a long run-up. But the controversy over artificial intelligence has almost certainly caused some investors to think twice about where the sector is heading.

The warnings about mankind possibly being wiped out within a few years are sobering indeed. And U.S. President Donald Trump’s insistence that there should be no pause in AI development, despite growing pleas from the leading AI companies for government intervention, shows an astounding level of recklessness.

No one knows with certainty where all this is going. But there are an alarming number of examples of AI going rogue.

From May to July this year OpenAI agents carried out a series of cyberattacks without human intervention on machine-learning platform Hugging Face. These AI agents were found to have created improvised message boards to communicate with one another before OpenAI staff discovered what was happening and intervened.

Last week, OpenAI revealed six new cases of “unexpected or concerning” behavior of its AI models, including making up data and moving files onto the internet without permission. Even more frightening was the report that an AI generated analysis had falsely claimed a Chinese ship carrying nuclear materials was en route to Iran. Fortunately, the error was found before the U.S. took action to board the vessel, potentially creating a tense military standoff.

Reguly: Don’t believe the calls for slower AI development will work. The juggernaut will keep rolling

All this suggests AI is breaking away from its controllers at an alarming rate. But Mr. Trump seems more concerned about China beating the U.S. to AI supremacy than in warnings from industry leaders that we could be facing a threat to our survival.

It’s like we’re witnessing a rerun of the nuclear arms race, with even higher stakes!

Tech giants are spending hundreds of billions of dollars to commercialize AI in any way they can. It’s estimated that more than US$1-trillion has been spent on research and development to date. By 2030 that figure could rise to US$5-trillion plus. This is speeding up the whole process and increasing the risk of rogue behaviour that could lead to disastrous results.

Most major tech companies are committing huge sums to AI development. Here are updates on some of our Internet Wealth Builder tech recommendations and their involvement in AI.

Nvidia (NVDA-Q)

Originally recommended on May 31/21 at $16.24 (adjusted for 10-1 split). Closed Friday at $222.27. (All figures in U.S. dollars.)

Background: Nvidia made its name with the graphic processor units used in gaming systems such as Microsoft’s XBox, but it is now the primary engine behind the global artificial intelligence revolution. It provides the essential chips, software platforms, and data centre infrastructure required to build and run modern AI systems.

Performance: The stock started the year slowly, then shot up to almost $410 in June. It has been trending downward since but is still ahead about 18 per cent year-to-date.

Use of AI: Nvidia pioneered programmable GPUs using its “CUDA toolkit,” a programming platform that allows computer chips to handle the massive simultaneous calculations needed to train neural networks. The company is also building “AI factories” in partnership with tech giants like OpenAI and Amazon Web Services.

That’s not all. Nvidia is working on physical AI platforms (i.e., robots) that allow them to learn and make decisions in real world environments.

Recent financials: Nvidia’s second-quarter 2027 results once again beat analysts’ estimates by a wide margin. Revenue was $96.2-billion, up 18 per cent from the previous quarter and up 106 per cent from a year ago. GAAP and non-GAAP gross margins were both 75 per cent. GAAP and non-GAAP earnings per diluted share were $2.46 and $2.22, respectively.

“AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable,” said Jensen Huang, founder and chief executive officer. “And demand is accelerating. This time last year, one lab alone was driving the buildout; today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online with strong momentum across the US and around the world. The AI infrastructure buildout is at full steam.”

Dividend and buybacks: The company pays a quarterly dividend of 25 cents a share ($1 a year) to yield 0.45 per cent at the current price. It is also repurchasing shares in the open market and had about $99-billion remaining under its repurchase authorization as of the July 26 quarter end.

Outlook: If the AI boom continues, Nvidia will continue to grow at an unprecedented rate as the primary beneficiary of the science. But if it slows or is hit by government regulation, the share price could plunge.

Action now: Hold.

Amazon.com Inc. (AMZN-Q)

Originally recommended on Jan. 16/17 at $40.86 (split adjusted). Closed Friday at $253.86. (All figures in U.S. dollars.)

Background: Amazon.com is a global leader in e-commerce and cloud computing, with its Amazon Web Services (AWS) division driving significant growth and innovation. The company’s scale and technology investments continue to set it apart in retail, logistics, and digital services.

Performance: The shares reached an all-time high of $287.20 in July but then went into a slide along with the rest of the tech sector. They showed signs of rallying last week and are up about 10 per cent year-to-date.

Use of AI: AWS AI Services are building massive infrastructure, foundational models, and internal agentic application. Amazon’s key AI functions include:

• Amazon Bedrock. This is a platform for building generative AI applications and multi-agent systems using frontier models – highly advanced, large-scale AI models.
• Amazon Nova. This is Amazon’s proprietary family of foundation models. They deliver high-performance intelligence for text, image and AI developers.
• Amazon Connect. This is the company’s customer experience and contact centre platform integrated with agentic capabilities. If you’re not familiar with the word “agentic” it means “having the autonomy, power, and reasoning ability to act independently toward a specific goal rather than just reacting to instructions,” according to Merriam-Webster.

The company has invested $50-billion in OpenAI, a deal which raised eyebrows when it was announced last February. The arrangement gives Amazon an equity stake of about 5 per cent in OpenAI. Amazon has also invested $13-billion in Anthropic, with an agreement that allows the total commitment to rise by an additional $20-billion. That brings the potential total to $33-billion.

Recent financials: Second-quarter results (to June 30) were impressive. Net sales increased 20 per cent to $200.6-billion, compared with $167.7-billion in the same second quarter of 2025. Amazon reported its strongest cloud growth in more than four years. Amazon Web Services (AWS) revenue rose 37 per cent to $42.2-billion, exceeding Street expectations of 31-per-cent growth.

Operating income increased to $27.5-billion in the quarter, compared with $19.2-billion in the same period of 2025. Net income was $62.6-billion ($5.75 per diluted share), up from $18.2-billion ($1.68 per share) a year ago.

However, free cash flow decreased to an outflow of $7.6-billion for the trailing 12 months. This was driven primarily by a year-over-year increase of $66.1-billion. This reflects investments in artificial intelligence and caused some investors to worry about cash burn.

Outlook: Third-quarter net sales are expected to be between $197-billion and $202-billion, or to grow between 9 per cent and 12 per cent compared with third quarter of 2025. Operating income is expected to be between $22.5-billion and $26.5-billion, compared with $17.4-billion last year.

Action now: Amazon’s P/E is a reasonable 20.45 times, well down from 700-plus times when I originally recommended it. Plus, the huge investments it is making in AI seem to be paying off. That said, the stock has been trending down for almost two months. If you don’t own the stock, take a small position now and add to it if the shares drop further.

Alphabet (GOOGL-Q)

Originally recommended on March 10/14) at $30.37 (split adjusted). Closed Friday at $349.54. (All figures in U.S. dollars.)

Background: Alphabet is the parent company of Google, YouTube, Android, Chrome, Waymo and a variety of other leading-edge, high-tech ventures.

Performance: The stock started the year in a downtrend, then rallied to an all-time high of $408.61 in June. It’s been drifting down recently, although it’s still ahead about 12 per cent year-to-date.

Use of AI: Alphabet is investing huge amounts of money in AI, which has weighed on its share price. The company expects to spend between $195-billion and $205-billion on capital expenditures in 2026, driven overwhelmingly by technical infrastructure for artificial intelligence.

Alphabet spent $45-billion in the second quarter alone, double the amount spent during the same period in 2025. SEC filings indicate that Alphabet has committed an additional $811-billion in future spending, largely earmarked for AI infrastructure.

Alphabet is using artificial intelligence to power its core consumer products, scale enterprise cloud services, and build massive underlying computing infrastructure. For example, Alphabet is embedding its Gemini AI model across Android devices, cars, TVs, watches and core apps like Google Search and YouTube.

Recent financials: Second-quarter revenue was up 24 per cent to $119.8-billion. It marked the company’s 12th consecutive quarter of double-digit revenue growth. The strong performance was driven by Cloud revenue, which was up 82 per cent. Search and ad revenue rose 17 per cent and YouTube was up 13 per cent year-over-year. Net income available to common stockholders increased 298 per cent to $112.1-billion. Earnings per share increased 294 per cent to $9.11.

Dividend: The stock pays a quarterly dividend of 22 cents a share (88 cents a year) to yield 0.25 per cent at the current price.

Outlook: Alphabet is making a huge bet that its investments in AI will pay off. The jury is still out on whether they are right.

Action now: Hold.

Apple Inc. (AAPL-Q)

Originally recommended on April 13/20 at $66.62 (split adjusted). Closed Friday at $333.67. (All figures in U.S. dollars.)

Background: Apple’s iPhones and iPads dominate the market, making it one of the most valuable companies in the world, with a market cap of almost $5-trillion. The company has about 150,000 employees.

Performance: After a midsummer slump, the stock has rallied but is trading below its all-time high of $344.57.

Use of AI: Apple mainly uses AI to enhance the performance of Siri, its conversational search device. An enhanced version of Siri was unveiled earlier this month, but critics say it lacks the power and functionality of competing products.

The company has not invested in AI on the same scale as some of the other major players. The money it has spent is focused on acquisitions of smaller companies with the patents and skills to improve its own products. One of its largest deals, in February of this year, was the purchase of Israeli start-up Q.aifor between $1.6-billion and $2-billion. Q.ai specializes in machine learning that interprets speech through audio and subtle facial cues.

Recent financials: The company reported third-quarter 2026 revenue of $109.4-billion, up 16 per cent over last year. iPhone sales rose 21.7 per cent to a record $54.25-billion. Gross margin was 50.1 per cent, including a favourable impact of approximately two percentage points from tariff refunds. Diluted earnings per share was $2.02, up 29 per cent year-over-year, and included a favourable impact of 11 cents from tariff refunds.

For the first nine months of the fiscal year, Apple reported total net sales of $364.4-billion, up from $313.7-billion last year. Net income was $101.5-billion ($6.88 per diluted share), compared to $84.5-billion ($5.62 per share) in fiscal 2025.

Dividend: The stock pays 27 cents per quarter ($1.08 a year) to yield 0.3 per cent at the current price.

New product: This month, Apple unveiled its Duo iPhone, which features a foldable screen. The launch caught investors off guard, since foldable phones offered by companies such as Samsung have not been in great demand. The price may also be a deterrent; the company says it will start in Canada at $2,999.

Outlook: The company warned that supply constraints would weigh on near-term growth, shifting investor focus to how component shortages and expected price increases could affect future demand. As for AI, Apple’s commitment is low compared with the huge amounts of money being tossed around by Nivida, Amazon and Alphabet, among others.

Action now: We previously advised taking half profits, so hold the balance of your position.

The billions of dollars being spent by the tech industry on AI explains why some industry leaders are underplaying concerns about the dangers that the technology could developing a life and will of its own and attempt to take control of anything within its purview.

Nvidia’s Mr. Huang has said AI doomsday fears and calls for a development slowdown are “not grounded in science.” Instead, he argues that safety is an engineering issue rather than a legal one.

Perhaps he’s right. But if he isn’t, we could be in trouble. AI is the genie that we can’t put back in the bottle. We need to build effective safeguards now. If we fail and it decides to run amok a few years down the road, the consequences could truly be catastrophic.

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.