Nvidia stock is a top buy for tech investors, as the company’s AI-enabled GPUs are powering the AI revolution.
Broadcom stock is a great buy, thanks largely to strong demand for the company’s custom AI chips.
Taiwan Semiconductor Manufacturing stock is a great buy because the world’s largest chip foundry is benefiting significantly from strong demand for AI chips, both GPUs and custom chips.
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Artificial intelligence (AI) stocks, as a group, were among the best performing groups in 2025, as they were in 2024.
Three AI stocks that were big winners in 2025, as of December 23, and that I believe will be big winners again in 2026, are Nvidia(NASDAQ: NVDA), Broadcom(NASDAQ: AVGO)and Taiwan Semiconductor Manufacturingor TSM (NYSE: TSM).
Image source: Getty Images.
Stocks are listed in 5-year return order.
Company
Head of Market
Forward P/E
5-Year Annual EPS Growth Wall Street Estimate
Stock Return 2025 year to date
5 Year Stock Return
Nvidia
$4.8 trillion
24.0
48.5%
40.9%
1,359%
Broadcom
$1.7 trillion
34.4
35.9%
52%
813%
Taiwan Semiconductor Manufacturing
$1.2 trillion
24.5
30.4%
52.4%
211%
S&P 500 Index
—
—
—
19%
102%
Data sources: Yahoo! Finance and YCharts. P/E = price to earnings ratio. EPS = earnings per share. Data as of 23 December 2025.
Nvidia’s graphics processing units (GPUs), its flagship semiconductor, are considered the gold standard for training artificial intelligence (AI) models and deploying AI applications.
The company’s data center platform had been performing well for quite some time. But demand began to pick up for its AI-enabled products — GPUs and high-performance networking products — shortly after OpenAI released its ChatGPT chatbot in late 2022. This event demonstrated to company leaders and the general public the phenomenal capabilities of generative AI.
In late October at the company’s GTC (GPU Technology Conference) in Washington, DC, CEO Jensen Huang said management has “visibility” into $500 billion of demand for its core data center technology over the next five quarters. This demand of $100 billion per quarter, on average, is truly mind-boggling. As a context, in its third fiscal quarter (ended late October), Nvidia’s total revenue was $57.0 billion, of which $51.2 billion was from the data center platform.
Broadcom develops semiconductors for various end markets and also develops infrastructure software.
The company’s robust growth is being driven by strong demand for application-specific integrated circuits (ASICs) and Ethernet networking products, both for data centers. Its acquisition of software maker VMware in late 2023 is proving to be a wise move, as this business is also growing well.
Broadcom is the best partner for large technology companies looking for custom ASICs. As the name suggests, these chips are designed for specific applications. These include internal uses and, in some cases, for availability in their cloud computing services. In contrast, Nvidia’s GPUs can be considered AI chips for more general purposes. There is a need for both GPUs and ASICs, so investors should not be concerned that one of these types of chips will fully win over the other.
Taiwan Semiconductor Manufacturing is the largest chip foundry in the world. This means that it produces chips of various types for companies that contract the manufacturing of all or part of chips that they design.
TSM is the largest producer of AI chips worldwide, which has led to significant financial growth in recent years, driven by increasing demand for these chips.
TSM’s customers include almost every major chip company, such as Nvidia, Broadcom, and Advanced Micro Devices (AMD), which is Nvidia’s main rival in the AI-enabled GPU market. In addition, it also manufactures chips, including AI chips, for major technology companies that have designed their own chips. This includes Applewidely considered the company’s largest customer, although some Wall Street analysts expect Nvidia to soon overtake Apple as TSM’s top customer.
An added benefit for some investors is that TSM pays a decent dividend for a technology company. The dividend yield was 1.13%, as of the market close on December 23rd.
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Beth McKenna holds positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
Prediction: These 3 Artificial Intelligence (AI) Stocks Will Be Big Winners Again in 2026 was originally published by The Motley Fool
