3 Best Tech Stocks to Buy in December

This has been a dynamic year for the stock market. Despite trade conflicts, tariff wars, rising prices, and a softening labor market, the stock market is on track to post another positive year, led by the growth of artificial intelligence and the tech sector.

December means it's time to look at your portfolio and do some housekeeping to prepare it for 2026 -- tasks like rebalancing positions, doing some tax loss harvesting, and weighing what positions you might want to add for the new year. Technology will surely continue to be an important sector, and I believe that artificial intelligence will remain a dominant force.

There are lots of AI stocks that will play important roles in 2026, but if I had to choose three to buy right now, my picks would be Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Nvidia (NASDAQ: NVDA), and Taiwan Semiconductor Manufacturing (NYSE: TSM).

Image source: Getty Images.

Alphabet

Alphabet has been having a great 2025 and is setting itself up to be perhaps the best AI stock of 2026. The company started the year in a rough position as a federal court judge had already ruled against it in an antitrust case, finding that it was acting as an illegal monopoly in the internet search space. That judge was still weighing the Justice Department's request to compel Alphabet to spin off or sell its Chrome browser and Android operating system as part of the remedy for that behavior.

However, Alphabet avoided catastrophe when the judge ruled that it could remain intact, although it must share some of its search data with third parties. That leaves the tech giant with the massive competitive advantages provided by its dominant Chrome browser and Google search engine intact.

Alphabet leverages those advantages into an unstoppable advertising platform that generated $74.2 billion in revenue in the third quarter alone, accounting for more than 70% of its total revenue. In addition, Google Cloud, its cloud infrastructure business, brought in $15.2 billion in the quarter.

And now, Alphabet is looking to take a major role in data center architecture as well. While Nvidia's graphics processing units (GPUs) have been the dominant parallel-processing hardware for AI platforms since the trend began, Alphabet's tensor processing units (TPUs) are its in-house alternative. While they are less flexible than GPUs, TPUs are also less costly, and Alphabet is finding success in leasing them to its cloud clients. TPUs could also become a significant profit center via sales -- Alphabet is reportedly in talks for a deal to sell billions of dollars' worth of TPUs to Meta Platforms, which would install them in its own data centers.

If such a deal comes to fruition, Alphabet may become the No. 1 AI stock of 2026.

Nvidia

While Alphabet may be nipping at Nvidia's heels on the AI processor front, I'm not ready to slam the door on a semiconductor company that has leveraged the power and quality of its GPUs to become the most valuable company in the world.

Nvidia's Blackwell GPUs are currently driving its growth: Its data center sales accounted for $51.2 billion of the company's $57 billion in revenue for the third quarter of its fiscal 2026.

"Nvidia is unlike any other accelerator," CEO Jensen Huang said during the Q3 earnings call. "We excel at every phase of AI, from pre-training and post-training to inference. And with our two-decade investment in CUDA-X acceleration libraries, we are also exceptional at science and engineering simulations, computer graphics, structured data processing, to classical machine learning."

That's why it will be difficult -- but not impossible -- for companies like Alphabet to take a meaningful amount of Nvidia's dominant market share. And it has partnerships with nearly every major tech company, including Intel, Palantir Technologies, Anthropic, OpenAI, Microsoft, Oracle, and others.

Management expects revenue of $212.8 billion for the current fiscal year and forecasts $316 billion in revenue for the 2027 calendar year.

I agree with Huang: Nvidia is in a class by itself.

Taiwan Semiconductor Manufacturing

Nvidia and Alphabet may be vying for the top spot among AI stocks in 2026, but Taiwan Semiconductor won't be far behind. TSMC is the largest chip foundry in the world, and it is the leader in producing the most advanced chips. That means that whether it's Alphabet, Nvidia, Broadcom, Advanced Micro Devices, or another company designing any particular AI chip, TSMC will likely be the company actually producing it.

TSMC is one of the few fabricators that can produce chips using the 3-nanometer (nm) process node at scale. That's a big deal, because the smaller the transistors, the more of them that can be put on a single chip, which makes such chips more powerful and more energy efficient. Today, TSMC gets the majority of its revenue from making 3nm and 5nm chips.

TSMC is in the midst of investing $165 billion to expand its operations in the U.S., building five foundries and related structures in Arizona, where it's fabricating Nvidia's Blackwell chips. Revenue in the third quarter was $33.1 billion, up by 30% from a year earlier, and net income of $15.1 billion was up by 39%.

TSMC is ideally positioned to maintain its dominance as the leading fabricator of high-end AI chips, providing it with an outstanding runway for 2026.

Patrick Sanders has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Intel, Meta Platforms, Microsoft, Nvidia, Oracle, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.