December is the ideal time to give your investment portfolio a fresh look. As we're preparing to head into the new year, it's a good idea to take this opportunity to rebalance your positions, consider which ones you need to exit, and how to best set your investments up for the future.
While I'm always a fan of using exchange-traded funds to build a diversified portfolio, I also strongly believe in holding a group of individual stocks that I think will outperform the market.
If you've got $50,000 ready to invest -- you've paid off high-interest debt and won't need the money in the short or medium term -- here are five stock picks to consider. Each of them gets $10,000 in this hypothetical scenario.
Nvidia
Nvidia (NVDA 1.45%) is the king of semiconductor stocks -- in fact, it's the king of the stock market right now. Nvidia's graphics processing units (GPUs) are so effective in training and running artificial intelligence programs, machine learning, and generative AI that it has become the largest publicly traded company in the world.
NASDAQ: NVDA
Key Data Points
Nvidia is estimated to own as much as 90% of the data center GPU market, and its Blackwell chips sold out in the company's most recent quarter, according to CEO Jensen Huang. It has made numerous partnerships with leading companies that are using its GPUs for AI training and inference. It's also partnering with the U.S. Department of Energy and multiple companies to build out the national AI infrastructure.
And you can bet that infrastructure will be powered by Nvidia's chips. This all makes the stock a strong bet for the future.
Alphabet
It appears that 2026 will be the year that Alphabet (GOOG 1.52%) (GOOGL 1.46%) starts making meaningful inroads in the chip space. It has been utilizing its in-house Tensor Processing Units (TPUs) as an alternative to other chips and has developed them to the point where they can run large-scale AI workloads. Now Alphabet is reportedly in talks with Meta Platforms to supply TPUs for Meta's data centers in what would be a multibillion-dollar deal.
NASDAQ: GOOGL
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But even if that doesn't happen, I still love Alphabet stock. It has the leading browser in Chrome and the leading search engine in Google -- both have dominant shares of the market. Its advertising revenue was more than $74 billion in the third quarter, and its Google Cloud revenue was $15.1 billion -- up 33% from a year ago.
Alphabet seems primed for a massive year.
Taiwan Semiconductor Manufacturing Co.
Taiwan Semiconductor Manufacturing Co. (TSM 4.44%) is the go-to foundry for Nvidia, Alphabet, and most other semiconductor manufacturers. TSMC, as it's popularly known, is the world's largest chip fabricator, with 60% of its revenue coming from 3nm and 5nm chips, which are essential for the most powerful semiconductors. TSMC's ability to refine its manufacturing processes and use smaller chip nodes gives it a massive advantage over competitors such as Samsung or Intel.
TSMC also makes chips for smartphones, the automotive industry, and to power Internet of Things products. The company is extremely versatile, using nearly 300 processes in 2024 to make almost 11,900 different products. And talk about consistency -- TSMC has enjoyed a compound annual growth rate of 18.2% since it went public in 1994.
That should continue as well -- the company is projecting revenue CAGR of nearly 20% and its gross margins to top 50%.
Image source: Getty Images.
Tesla
Tesla (TSLA 2.50%) has been a high-flying stock in the past, but 2025 was a step backward. CEO Elon Musk got involved in politics and President Donald Trump's election, then went to Washington to run the controversial initiative called the Department of Government Efficiency. Musk has since left Washington, and DOGE has closed, but the impact on Tesla stock was clear -- Tesla stock trails the broader market.
Sales of Tesla's electric vehicles are projected to take a hit this winter, and the company's profit margins are down, but Musk's company may be on the verge of a major breakthrough with autonomous driving. It's making rapid improvements in its self-driving software, which, when perfected, the company says, will allow Tesla owners to monetize their vehicles by making them available for robotaxis.
Melius Research analyst Rob Wertheimer has said Tesla's FSD (full self-driving) software will shift "hundreds of billions in value" from other automakers to Tesla. "The world is about to change, dramatically," he wrote in a research note. Many investors believe this to be true.
NASDAQ: TSLA
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Credo Technology
This may be the most consequential company that you've never heard of. Credo Technology (CRDO 1.96%) provides wiring that data centers need to connect the hundreds of GPUs, TPUs, and other infrastructure components, enabling them to run AI programs.
Instead of copper wiring, Credo uses active electrical cables (AECs) to link chip clusters. The AECs have signal processors in the wiring -- a feature not found in common copper wiring -- that helps move data faster and more efficiently.
Credo's most recent quarter resulted in revenue of $268 million, which was up a whopping 272% from a year ago. For the next quarter, Credo is projecting revenue from $335 million to $345 million, which would be another 151% jump. And margins are expected to be at least 63%.
Credo may not be a sexy pick, but it looks set to bring in massive profits in 2026.
