Two companies within the S&P 500 are showing impressive gains in 2025 and may continue their upward trend in the upcoming year.
The current S&P 500 bull market hit its third anniversary in October 2025. Ryan Detrick, a leading market strategist at Carson Group, has pointed out that historically, bull markets lasting three years tend to extend for an average of eight years; this conclusion draws from data stretching back to 1950. Detrick’s optimism about this market is bolstered by the healthy profit increases seen among tech companies. Additionally, analysts at HSBC anticipate that ongoing investments in artificial intelligence (AI) infrastructure will push the S&P 500 index to reach the 7,500 mark.
Technology stocks, in particular, are set for notable returns in 2025, as illustrated by the 22% increase observed in the Nasdaq Composite index. For tech investors, the outlook remains bright as the Nasdaq is expected to continue its ascent in 2026, driven by a broader market rally.
These indicators suggest that now might be an ideal time to consider investing in tech stocks that have already performed well this year and could potentially soar even higher in 2026.
1. Advanced Micro Devices
With an anticipated return of 81% by 2025, Advanced Micro Devices (AMD 4.86%) is outpacing the PHLX Semiconductor Division index, which has risen significantly by 46%. This strong performance can be attributed to AMD’s growth in the AI data center market, characterized by high demand for its graphics processing units (GPUs) and server processors.
AMD has significant contracts with major players like OpenAI, Oracle, and Microsoft, who are utilizing AI chips. These contracts contribute to AMD’s expectations for an accelerated revenue stream from data centers starting next year. The company noted during its recent financial analyst event that it’s projecting over 60% annual growth in data center revenue over the next three to five years, which is a step up from the 52% growth seen in the past five years.
Furthermore, AMD’s personal computing (PC) segment is thriving. Client Processor revenue grew by 46% year-over-year in the third quarter, reaching $2.8 billion—a record figure. This segment is benefiting from the rising demand for AI PCs and AMD’s expanding market share against its competitor, Intel. Looking ahead, 2026 is poised to be another strong year for AI PC sales, with an expected shipment increase of 83% to 143 million units.
All signs point to AMD maintaining its impressive growth into 2026. Analysts predict a triple growth in earnings next year, estimating it to rise over 62% to $6.44 per share. Currently, AMD stock appears to be a reasonable investment with a forward earnings multiple of 35, compared to the tech sector’s average of 46 times.
If AMD hits the projected earnings of $6.44 per share, reminiscent of industry averages, the stock could potentially reach $296. This hints at a possible upside of 34%, with additional growth expected in 2026, making it seem wise to buy this tech stock now.
2. Alphabet
Alphabet (GOOG 1.03%) is another Nasdaq stock performing well in 2025, showing a 67% increase as of now. The company’s strong pace is largely driven by its investments in AI, reflecting the notable rise of stocks in the Magnificent Seven group.
In the last quarter, Alphabet’s sales hit $102.3 billion, a 16% increase from the previous year, while revenue grew at a remarkable 35% year-over-year. The company is seeing strong growth across its search and cloud sectors, with management pointing to investments in AI software like the Gemini app and enhancements in cloud computing infrastructure, which are driving better user engagement.
Notably, the AI mode in Google Search attracts 75 million daily users, which is quite impressive given its relatively recent launch. The AI summarization feature is also enhancing user engagement by addressing more inquiries effectively.
The Google Cloud segment reported a 34% increase in revenue year-over-year, and projections indicate it will continue to grow robustly from 2026 onward. The cloud AI market is anticipated to quadruple within five years, potentially generating $327 billion in revenue by the end of that period.
Google’s cloud infrastructure facilitates customers in building, customizing, and deploying AI applications. The company utilizes chips from Nvidia, AMD, as well as its internally designed chips. Recently, Anthropic announced plans to deploy up to 1 million custom chips from Alphabet, with Meta Platforms likely considering similar contracts for AI chips.
Investors should take note that Alphabet had a backlog of $155 billion in its cloud unit at the end of the last quarter—a figure that rose 46% quarter-over-quarter—indicating a strong demand for AI-based cloud services ahead.
Overall, Alphabet aims to position itself as a comprehensive AI solutions provider, enhancing access to cloud infrastructure, large-scale language models like Gemini, and AI-driven applications that improve productivity, which is likely to support solid long-term growth. While its heavy investment in AI infrastructure might temporarily impact revenue next year, the long-term perspectives remain promising.
Considering its attractive forward price-to-earnings ratio of 29, well below the tech sector average, now might be a good time for investors to consider buying Alphabet stock.
