5 tech stock picks for 2026

Nancy Tengler highlights Palantir as a key pick for 2026, emphasizing its leadership in AI and data for defense and corporate adoption. She notes that while its valuation is hard to justify, the compelling narrative, similar to early Amazon, can drive long-term stock growth. She also discusses the challenge of reconciling classical value investing principles with high-growth, transformative companies like Palantir.

Comparing Palantir and Tesla, Nancy indicates Tesla is her preferred choice, naming it a 'transformative AI leader.' She points to its advancements in full self-driving, robotics, and the XAI investment, as well as upcoming ventures like the space business. She addresses Elon Musk's motivation, likening him to a driven individual who thrives under pressure and delivers on ambitious promises, even if not always on time. She compares Tesla's EV business to Apple's handset business, suggesting the AI aspect is the future growth driver.

Speaking about Amazon, Nancy agrees that the stock has been a laggard despite robust earnings, including a significant beat last quarter. She highlights the 20% growth of the mature AWS business, noting that October's growth in AWS surpassed the entire third quarter. She also mentions that Tranium is at full capacity with a backlog and trades at a favorable P/E ratio, indicating that Amazon is fairly valued with strong potential for robust earnings and increased free cash flow in the coming year.

Nancy shares her experience managing money for Warren Buffett after his acquisition of Cologne Reinsurance. She emphasizes Buffett's perspective and kindness, highlighting that these qualities are often lacking in the investment business. She also notes Buffett's ability to pivot, citing his investment in Apple as an important moment for investors to heed.

Nancy stresses the critical importance of learning from mistakes in investing, stating it's a topic she frequently discusses with her analyst team. She explains that humility to admit mistakes is essential for personal growth and success. She concludes with the firm's watchword: 'investing is about being mostly right,' which, despite daily errors, helps them achieve top 1% returns over the long term, acknowledging the humbling nature of the business.