As we near the end of 2025, investors are starting to consider which stocks might shine in 2026. Often, we see these stocks gain momentum as portfolio managers allocate funds, leading to what’s commonly referred to as a Santa Claus rally. Getting in on these stocks early could really amplify returns.
I think there are three stocks to really keep an eye on for 2026: Nvidia (NASDAQ:NVDA), Taiwan Semiconductor (NYSE:TSM), and Alphabet (NASDAQ:GOOG). Snapping up shares of these companies now might be a smart move.
Nvidia has consistently been a top player in the market over the last three years, largely due to its leading graphics processing units (GPUs). A lot of the generative AI that’s becoming so prominent runs on Nvidia’s hardware, although there’s some debate about whether they’re still the best option out there.
Competitors like AMD and specialized AI accelerators from companies like Alphabet are certainly challenging Nvidia’s position. Still, Nvidia’s CEO, Jensen Huang, mentioned during the last earnings call that their cloud GPUs are “sold out.” This somewhat counters the notion that they’re losing ground, and it makes sense for investors to explore alternatives when looking to enhance computing capabilities.
Overall, the outlook for Nvidia remains strong, especially in the AI sector, making it a solid choice for 2026.
Alphabet’s tensor processing unit (TPU) has been developed internally in partnership with Broadcom. They might even sell TPUs directly to Meta Platforms, which could allow Meta to bypass Alphabet’s cloud services altogether. This change could open new revenue doors for Alphabet that hadn’t been anticipated.
Even aside from this potential opportunity, Alphabet’s performance has been impressive, with third-quarter sales rising by 16% year over year to $102 billion, and diluted earnings per share (EPS) growing by 35% year over year.
Remarkably, Alphabet’s stock has performed quite well in the latter half of this year. I’m inclined to think that there’s still plenty of room for growth, particularly if they can capitalize on the TPU opportunity alongside their existing business, which seems to be thriving.
Another key player in the AI landscape is Taiwan Semiconductor Manufacturing, or TSMC, although it often flies under the radar.
While companies like Nvidia and Alphabet focus on designing computing units, they rely heavily on TSMC—currently the largest chip manufacturer in the world—to make their chips. Without TSMC, the advancements seen in AI wouldn’t be what they are today. TSMC is making strides with their latest technology to address upcoming challenges.
They’ve already started producing 2-nanometer chips, which are expected to be significantly more efficient. When set to process at speeds similar to the older 3nm generation, these chips can use 25% to 30% less energy.
Energy efficiency plays a critical role in AI development. If TSMC’s chips deliver as promised, it might enable the company to continue supporting AI innovations at their current pace.
TSMC occupies a neutral spot in the semiconductor industry, suggesting it stands to benefit as investments in AI infrastructure increase. This hypothesis seems valid, especially as major players in AI signal substantial capital expenditures for data centers in 2026. Hence, it may not matter whose computing units they use—making TSMC a compelling stock for 2026.
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