3 Top AI Stocks to Buy With $1,000

Source The Motley Fool

Key Points

  • Given its already huge market cap, Nvidia continues to top analysts' expectations.

  • TSMC's ability to manufacture at scale ever-smaller nodes in the chips it produces will provide massive benefits.

  • Alphabet has transformed from an AI loser to an AI leader.

  • 10 stocks we like better than Nvidia ›

While the market shows signs that it might be easing up a little on its craze for all things artificial intelligence (AI) and getting a little wary about the massive spending sprees among the AI hyperscalers, there is still outsized interest in great AI-related stocks. There is still a ton of AI spending planned for 2026 and beyond, and opportunities for investors to take advantage.

If you've got $1,000 available that isn't needed for an emergency fund or to pay down short-term debt, I can think of a few places it can be put to work, such as investing it in Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing (NYSE: TSM), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Each of these companies looks primed to deliver outsized growth in their businesses and their stocks in 2026. Here's why these three are top AI stocks at the moment.

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Image source: Getty Images.

Nvidia

Nvidia has been the leader of the artificial intelligence computing trend with its industry-leading graphics processing units (GPUs) and the various products it makes to support them. Many of the AI capabilities in use today were built on Nvidia hardware and with the help of Nvidia software. That fact doesn't look to be changing anytime soon.

CEO Jensen Huang noted during Nvidia's fiscal third-quarter earnings announcement that the company has sold out of its cloud computing hardware, as demand continues to outpace supply. This control of cloud computing chips (which are sold at a high-margin premium because of the high demand) has helped Nvidia deliver excellent results, with revenue rising 62% year over year to $57 billion in Q3. For Q4, Nvidia expects revenue to rise to $65 billion.

Investors would be hard-pressed to find a company operating at a higher level than Nvidia, and with AI computing build-out slated to maintain its current pace for several more years, I think Nvidia is a must-own stock.

Taiwan Semiconductor Manufacturing

Nvidia couldn't sell all of the high-end chips it designs without the production prowess of Taiwan Semiconductor Manufacturing, or TSMC, as it is also known. Nvidia is a fabless chip company, which means it designs the hardware and then outsources the manufacturing. TSMC is its primary chip manufacturer, and it is very good at its job. It also happens to be a primary manufacturer for many of Nvidia's competitors. This puts TSMC at the neutral center of the AI arena. As long as AI spending is rising (no matter which chip design is winning), TSMC stands to benefit.

During Q3, its revenue rose at an impressive 41% year-over-year pace, showcasing the high demand for its manufacturing capabilities. Even better, TSMC is incorporating new manufacturing technology that could increase demand for its services even further.

It can now produce chips designed to use a 2nm (nanometer) chip node, and has some incredible expectations for how this will help its top-line revenue. TSMC's management expects 2nm chips will consume 25% to 30% less power than the current top-of-the-line 3nm chips when configured to run at the same speed. With energy consumption becoming a huge issue in the AI build-out, the ability to produce these chips at scale should allow TSMC to charge a hefty premium on the chips, leading to further revenue growth.

Alphabet

Alphabet is one of the aforementioned hyperscalers, and it expects the added spending to pay off thanks to what it asserts is its superior technology. Alphabet is developing AI models specially designed to be incorporated into its Google Search platform, which is Alphabet's primary source of revenue and profits. It has already achieved success doing this with its AI search overview and managed to do so while still protecting its advertising model, which is key to Alphabet's success.

Alphabet is also building out its outsourcing capacity for its cloud computing division, Google Cloud. Google Cloud is growing at an impressive rate as AI clients rent computing power from Google's data centers. This tech sector is expected to benefit from the growing demand for AI and non-AI tailwinds alike, and is a great place to spend money to capture market share that will provide a steady source of income for the foreseeable future.

Alphabet was for a time viewed as an AI loser, but the company has made the needed investments in superior products to help it return to an AI leadership role. I think this trend will continue throughout 2026, making it an excellent buy now.

Should you invest $1,000 in Nvidia right now?

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Keithen Drury has positions in Alphabet, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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