If you've got some cash on the sidelines, now could be a great time to deploy it. Sometimes, a rally occurs at the end of the year, often known as the "Santa Claus Rally" because it happens around Christmas. This takes place because fund managers are positioning themselves for 2026, and the sector that they believe will do the best in 2026 often does extremely well. Over the past few years, any company associated with artificial intelligence (AI) has done quite well to end the year, and I don't see anything different happening this year.
While there is some fear surrounding the depreciation schedule of AI hardware and whether the payoff period of investments will be worth it, the reality is that these companies see huge benefit in developing AI technologies, and there are a few that will particularly benefit from this buildout.
If you've got $50,000 in cash waiting to deploy, or really any dollar amount, I've got a few stocks that should be at the top of your holiday shopping list.
Image source: Getty Images.
Nvidia
Nvidia (NVDA 2.66%) has been a top stock pick over the past few years for good reason; its graphics processing units (GPUs) are powering the AI trend. Nvidia's ecosystem is unparalleled, and the flexibility its computing provides sets it apart from the competition.
NASDAQ: NVDA
Key Data Points
While the past few years have been good for Nvidia, 2026 could be even better. The AI hyperscalers have all announced 2026 capital expenditure expectations, and they appear to be far higher than 2025's already record-setting values. The race to construct as many AI data centers as possible is on, and companies like Nvidia are slated to benefit from this massive buildout.
I think this provides a great catalyst for Nvidia to end the year, and it is an excellent stock to buy now.
Broadcom
Nvidia isn't the only AI computing name in town. Broadcom (AVGO 0.63%) is also a worthy competitor, as it has launched a viable alternative to GPUs.
GPUs are still the best accelerated computing units available to run a wide variety of workloads. However, AI data centers often only see one workload come through their servers, so if a company could strip out all of the features that make a GPU flexible and optimize it for one workload, it could provide a computing unit with higher performance at a lower price point.
NASDAQ: AVGO
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That's exactly what Broadcom has done, and it has partnered with various AI hyperscalers to develop its own chips optimized for its clients' workloads. This has allowed Broadcom to carve out a niche for itself in the AI computing market, although it's not nearly the size of Nvidia's empire.
Broadcom is a great stock to watch in 2026, as its custom AI accelerators could become a much larger part of the broader AI picture. This makes it a great stock to buy now, and I think investors should load up on it before even more promising results arrive.
Taiwan Semionductor
Neither Broadcom nor Nvidia has the capabilities to produce their own chips, so they outsource that work to a chip factory like Taiwan Semiconductor (TSM 1.36%). Taiwan Semiconductor is the world's largest chip manufacturer by revenue and has captured a large part of the AI computing power market. But it's not resting now that it has won a huge market share, either.
NYSE: TSM
Key Data Points
TSMC is constantly innovating and is launching a new 2nm (nanometer) chip node right now. This chip could be a game changer for the industry, as it consumes 25% to 30% less power than previous chip generations when configured to run at the same speed. Considering power consumption is becoming a huge problem in the AI realm, this improvement will be rolled out quickly in Nvidia and Broadcom computing units.
Taiwan Semiconductor will benefit regardless of which computing unit provider excels over the next few years. I think this makes TSMC an excellent stock to buy now, as it's slated to deliver monster performance throughout 2026 and beyond.
