With 2026 quickly approaching, investors need to have a game plan for what stocks they will buy. Several interesting trends are brewing in the market, and may cause investors to think differently about how they want to invest. Still, I think some smart investments in the artificial intelligence (AI) realm could result in monster returns in 2026.
Three smart stocks to buy with $1,000 right now for 2026 are Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL), Taiwan Semiconductor Manufacturing(NYSE: TSM), and Amazon(NASDAQ: AMZN). All three of these are primed to outperform the market in 2026, making them great buys now.
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Alphabet has been one of the best performing stocks in 2025, rising more than 60% so far. Alphabet’s performance can be tied to multiple successes, including the continued dominance of its core business, Google Search; developing a leading generative AI model in Gemini; and considering selling its custom Tensor Processing Units (TPUs) to outside clients.
Those are all significant developments that have answered many outstanding questions surrounding Alphabet’s stock at the start of 2025, clearing the way for another successful year in 2026. Wall Street analysts expect Alphabet to grow its revenue by nearly 14% next year, which is impressive considering its business maturity. That isn’t going to dramatically outperform the market, but it should be enough to propel Alphabet over the 10% threshold that many investors wish to exceed when picking individual stocks.
Alphabet has transformed from an artificial intelligence laggard to an AI leader in 2026, and I believe that trend will continue to power the stock higher in 2026 and beyond.
Keeping up with which company is providing the best computing unit possible is exhausting. While Nvidia and its graphics processing units (GPUs) have dominated so far, other companies like Alphabet are starting to challenge its dominance. This sparring will go back and forth forever, but what won’t change is where most of the chips are sourced from.
Taiwan Semiconductor is the world’s largest foundry by revenue and is the primary source for high-end computing chips, such as those used in various computing units within AI data centers. As long as AI hyperscalers continue to build out their AI computing power, Taiwan Semiconductor will remain an excellent investment. With the AI hyperscalers informing investors that 2026 will be another year of record-setting capital expenditures, this thesis is on track.
Taiwan Semiconductor also trades for less than 23 times next year’s earnings, making it the cheapest company on this list. Taiwan Semiconductor is set up for a great 2026 with all of the massive spending occurring, positioning it as a great stock to buy now.
Amazon has had a disappointing 2025, with the stock essentially flat for the year. That’s frustrating for investors, especially when stocks like Taiwan Semiconductor and Alphabet have done so well. However, this sets the stage for a comeback in 2026, especially behind the strength of its growing business units.
While most view Amazon as an e-commerce company, that segment doesn’t provide the majority of the profits. Instead, its cloud computing wing, Amazon Web Services (AWS), does. In Q3, AWS generated the majority of Amazon’s operating profits while growing revenue at a 20% pace. That’s faster than the companywide 13% growth rate. When the most profitable business unit is also growing faster than the overall business, that’s an excellent sign for investors.
Another area to watch is Amazon’s advertising business. Amazon’s ad business is the company’s fastest-growing division, rising 24% in Q3. It has also grown to become a huge part of the business, allowing it to boost Amazon’s margins as well.
The continued strength of both segments is key for 2026, and if they continue to do well, Amazon will make a comeback and be an excellent stock to buy and hold in 2026.
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Keithen Drury has positions in Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
