These AI Stocks Could Surge in December as Momentum Builds

With December rolling toward its close, there are a few stocks that I think could surge before the end of the month. While the market may be growing a bit weary of the artificial intelligence (AI) trade, the reality is that hyperscalers are going to be spending more than ever on AI computing power in 2026. This benefits a handful of companies in an outsized way, and some of those that have already been the biggest winners from that spending are positioned to keep prospering in 2026.

Three such stocks that I think could surge to end the year are Nvidia (NASDAQ: NVDA), AMD (NASDAQ: AMD), and Taiwan Semiconductor Manufacturing (NYSE: TSM).

Image source: Getty Images.

Nvidia

Nvidia has been a top-performing artificial intelligence stock since the buildout began in 2023. While there have been some impressive technologies developed over the past few years, we've only scratched the surface of what generative AI is capable of. As a result, hyperscalers are planning on record-setting data center capital expenditures in 2026 after setting new spending records in 2025. Nvidia is one of the primary beneficiaries of this spending because its graphics processing units (GPUs) provide a significant chunk of the computing power that goes into these data centers.

Nvidia's GPUs are best in class, in part thanks to the technology stack that supports them. It continues to deliver impressive quarter after impressive quarter, and the third quarter of its fiscal 2026 (which ended Oct. 26) was no exception. Revenue rose by 63% year over year, and diluted earnings per share (EPS) rose by 67%. Demand for Nvidia's GPUs was so high that CEO Jensen Huang noted that the company is "sold out" of cloud GPUs.

AI data center buildouts aren't expected to slow down anytime in the near future: Nvidia's management believes that by 2030, global data center capital expenditures will reach between $3 trillion and $4 trillion. Nvidia may be down a bit heading into 2026, but assuming that the expected spending will occur, it should be an excellent stock to buy now.

AMD

AMD hasn't had nearly as much success of Nvidia in the AI arms race. While its GPUs aren't far off in performance from Nvidia's, its supporting technology has lagged, specifically its controlling software. However, AMD has made a few acquisitions and inked some partnerships that have improved its supporting products, and management believes it can turn the company's fortunes around and make a big splash in the AI computing world.

Over the next five years, management believes the company can grow its data center business at a 60% compound annual growth rate. That would be a massive increase from the 22% growth that segment achieved in its most recently reported quarter. AMD will have a long way to go to prove that it is capable of delivering growth that rivals Nvidia's, but if it can, the stock should perform impressively.

I think the market may start to recognize this shift in fortunes, causing AMD's stock to rise in the last few days of December.

Taiwan Semiconductor Manufacturing

Both Nvidia and AMD design chips, but neither manufactures them in-house. Instead, like many other "fabless" chipmakers, they farm that work out to several companies. In the case of the most cutting-edge chips, that work mostly falls to Taiwan Semiconductor, the world's largest chip foundry by revenue. Taiwan Semiconductor is a genius investment because it doesn't matter whether it's Nvidia, AMD, or some other designer offering the best computing solution -- the foundry is still positioned to benefit from their sales. All that really matters to Taiwan Semi is that the AI hyperscalers are spending more and more.

Admittedly, its status as a neutral player in the AI buildout can limit its overall upside. However, based on the growth projections for the AI infrastructure market, I'd be surprised if Taiwan Semiconductor weren't a top-performing stock over the next five years.

It's also much cheaper than the GPU designers, trading at 28 times expected forward earnings.

TSM PE Ratio (Forward) data by YCharts.

I'm a huge fan of Taiwan Semiconductor and its invaluable position in the AI space, and believe the market may reward it heading into 2026.

Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.