These are Rosenblatt's favorite stocks for the second half of 2026

Rosenblatt Securities urges investors to buy AI/tech stocks for H2 2026 after a strong start to the year (S&P 500 up 9.5% in 1H, at all-time highs). In its top set of eight ideas, Ambarella is seen as a Physical AI “pure play,” targeting a $120 price target (~79% upside) with shares up 74% over 3 months. Quantinuum is viewed as undervalued for potential >100% upside (target $155, ~113%) and Twilio’s AI-enabled cloud communications push is expected to add upside to a $230 target (~16%), with Twilio up 68% over 3 months.

Analysis

The common thread here is not fundamental inflection so much as multiple expansion on a crowded “AI infrastructure” narrative. That makes the immediate risk/reward asymmetric: names that have already repriced hardest are most vulnerable to any delay in monetization, while the real upside is in companies where the next two earnings prints can still prove attach-rate or ARR acceleration.

AMBA is the cleanest operating leverage story, but it is also the most exposed to channel digestion if physical-AI demand is more pilot-heavy than production-heavy. If design wins are real, the upside is six to twelve months out; if they are aspirational, the stock can give back a large portion of the recent move in one disappointing quarter. TWLO has the better verification path because usage, cross-sell, and product adoption can be tracked in bookings and margin mix over the next 1-2 quarters, making it a more tradable story than a pure narrative name.

QNT is the highest-upside / highest-integrity-risk setup. If customer conversion and KPI disclosure continue to improve, it can re-rate, but the market will likely demand evidence before paying peer multiples; any missed milestone would hit the whole quantum basket, especially QUBT and IONQ, which trade more on sentiment than current revenue power. The contrarian view is that the market may be underestimating how much of the upside is already in price for the semiconductor and software names, while overestimating the immediacy of quantum commercialization; the next catalyst is less “new tech” and more whether management can turn demos into billable usage.

Key Decisions for Investors

• Prefer TWLO over AMBA for a 1-2 quarter horizon: long TWLO on any post-rally pullback, with a thesis tied to measurable cross-sell and AI-voice attach rates; risk/reward is better because execution can be verified quickly, while downside is capped if growth merely stabilizes.
• Fade crowded momentum in AMBA into strength: consider a tactical short or call-spread sale if the stock gaps on this note, with a stop above the recent breakout zone; the key falsifier is a sustained acceleration in shipments/design wins over the next earnings cycle.
• Treat QNT as a watchlist, not a conviction trade: only get aggressive after additional customer/KPI disclosure confirms monetization; if public quantum peers like QUBT rally ahead of proof, they are vulnerable to a sharp de-rating on any missed milestone.
• Pair trade idea: long TWLO / short QUBT for the next 1-3 months to express 'realization vs narrative'—TWLO has nearer-term proof points, while QUBT remains more dependent on market enthusiasm than recurring revenue conversion.
• Set an alert for the next quarterly prints: if AMBA and TWLO both beat but guide conservatively, expect a 'sell the news' reaction given the recent 3-month run; if guidance is revised up, the move can extend another 10-15% rather than the 2-3x implied by the bullish notes.