U.S.-China 2026 Tech Race: 2 AI Stocks & 2 Quantum Stocks to Watch

The U.S.-China technology race is increasingly becoming a contest over artificial intelligence, quantum computing, semiconductors, critical minerals and control of strategic technology supply chains. The latest escalation came on Aug. 14, when Reuters reported that Washington is preparing to urge countries participating in the U.S.-led AI cooperation to choose between the U.S. and China's competing technology ecosystems. The effort builds on Pax Silica, a U.S.-led initiative aimed at securing supply chains for AI, semiconductors and critical minerals.

Against this backdrop, four stocks, NVIDIA NVDA, Micron Technology MU, D-Wave Quantum QBTS and Rigetti Computing RGTI provide significant exposure to different layers of the emerging U.S.-led advanced-technology ecosystem.

Let’s get into more detail.

Strong AI Demand Offsets a Mixed Global Economic Backdrop

The strategic push comes as the global economy faces a relatively moderate and uneven growth environment. Going by its July Economic Outlook, the International Monetary Fund (IMF) projects 3% global GDP growth in 2026, while China's economy is expected to expand 4.6%.

Notably, the IMF says AI-driven demand is supporting economies integrated into the global technology value chain, even as the Middle East conflict weighs on activity and global disinflation has stalled. This divergence shows the growing importance of technology investment as a source of productivity and capital spending, while geopolitical fragmentation is prompting governments and companies to strengthen supply-chain resilience.

U.S. policymakers are simultaneously navigating persistent inflation and a softer labor market. The Federal Reserve maintained the federal funds target range at 3.5%-3.75% on July 29, noting that inflation remained elevated relative to its 2% goal, while productivity growth and capital investment remained strong. Meanwhile, U.S. nonfarm payrolls fell by 23,000 in July, sharply below expectations, although the unemployment rate edged down to 4.1% as labor-force participation declined (the U.S. Bureau of Labor Statistics).

The mixed backdrop makes companies positioned to benefit from long-term technology investment particularly relevant, as robust AI infrastructure spending and growing strategic support for quantum computing create opportunities across the next generation of advanced technologies.

4 Stocks Grabbing the Limelight

NVIDIA: It remains the dominant supplier of accelerated computing for AI infrastructure. Fiscal first-quarter 2027 revenues surged 85% year over year, while Data Center revenues jumped 92%. The company guided fiscal second-quarter revenues of approximately $91 billion, although the outlook assumes no Data Center compute revenues from China. With fiscal second-quarter results due Aug. 26, NVIDIA offers direct exposure to continued AI infrastructure spending, while China-related restrictions remain a key risk.

This Zacks Rank #2 (Buy) stock is projected to report 99.1% earnings growth for the fiscal second quarter on 96.2% revenue growth over the year-ago period. NVDA’s average price target of $305.85 represents an increase of 35.93% from the last closing price of $225.01.

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Micron: It provides exposure to a critical layer of the AI infrastructure stack beyond accelerators. Fiscal third-quarter 2026 revenues soared to $41.46 billion from $9.30 billion a year earlier. Cloud Memory revenues climbed to $13.77 billion and Core Data Center revenues reached $11.52 billion. Micron said its strong results and outlook reflect the strategic value of memory in the AI era. Its investments in technology, products and supply also support the broader push to strengthen semiconductor capacity.

This Zacks Rank #2 stock is projected to report 935.9% earnings growth for the fiscal fourth quarter on 348.6% revenue growth over the year-ago period. MU’s average price target of $1496.09 represents an increase of 47.87% from the last closing price of $1011.75.

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D-Wave: Its first-half 2026 bookings surged 1,120% year over year, while production applications accounted for 37.3% of quantum-computing-as-a-service revenues, up from 9.8% a year earlier. However, second-quarter revenues were marginally down year over year, affected by the early stage of commercialization. The combination of rapidly expanding bookings and increasing production use cases provides a potential long-term catalyst.

This Zacks Rank #3 (Hold) stock is projected to report 82.9% earnings growth for the third quarter of 2026 on 5.7% revenue growth over the year-ago period. QBTS’ average price target of $35.79 represents an increase of 71.47% from the last closing price of $20.87.

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Rigetti: It provides exposure to superconducting, gate-based quantum computing. Second-quarter 2026 revenues increased to $5.1 million from $1.8 million a year earlier, while cash, cash equivalents and available-for-sale investments totaled $541.3 million at quarter-end. The company also signed a U.S. Department of Commerce letter of intent for up to $100 million over three years to support quantum R&D.

This Zacks Rank #3 stock is projected to report 71.9% earnings growth for 2026 on 246.4% revenue growth over the year-ago period. RGTI’s average price target of $29.55 represents an increase of 58.28% from the last closing price of $18.67. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Radical New Technology Could Hand Investors Huge Gains

Quantum Computing is the next technological revolution, and it could be even more advanced than AI.

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