History says the S&P 500 will soar in 2026, and two magnificent stocks are poised to skyrocket before they do. Here's why you should consider buying them hand over fist.
The S&P 500 bull market, now three years old, is showing no signs of slowing down. Ryan Detrick, chief market strategist at Carson Group, points to the healthy earnings growth of tech companies as a key driver of this longevity. HSBC analysts predict the S&P 500 index will hit 7,500 levels, fueled by sustained spending on artificial intelligence (AI) infrastructure.
Technology stocks have already delivered impressive returns in 2025, with the tech-heavy Nasdaq Composite up 22%. This trend is expected to continue in 2026, driven by a broader market rally.
Here are two tech stocks that have been in impressive form this year and are likely to jump even higher in 2026:
- Advanced Micro Devices (AMD)
AMD's stock has outperformed the broader PHLX Semiconductor Sector index with an 81% gain in 2025. This success is attributed to AMD's growing presence in the AI data center market, where its graphics processing units (GPUs) and server processors are in high demand.
AMD has secured contracts with major players like OpenAI, Oracle, and Microsoft to deploy its AI chips. This has led to an expected acceleration in data center revenue, with annual growth exceeding 60% over the next three to five years, compared to the 52% growth seen in the past five years.
AMD's personal computing (PC) business is also thriving, with client processor revenue up 46% year-over-year in the third quarter to a record $2.8 billion. This segment benefits from the proliferation of AI PCs and AMD's market share gains against Intel.
Analysts predict AMD's bottom-line growth rate will triple in 2026 to over 62%, with earnings of $6.44 per share. The stock is currently trading at an attractive 35 times forward earnings, making it a decent deal for investors.
- Alphabet
Alphabet, a member of the 'Magnificent Seven', has seen 67% gains in 2025. This success is attributed to its healthy growth pace, fueled by AI investments.
Alphabet's revenue grew 16% year-over-year in the previous quarter to $102.3 billion, with earnings growing at a rate of 35%. The company's focus on AI tools, such as the Gemini app and AI search options, is driving user engagement and paving the way for stronger growth.
The Google Cloud business reported a 34% year-over-year increase in revenue, and investors can expect stronger growth in 2026 as the cloud AI market is expected to quadruple in size over the next five years, generating $327 billion in revenue.
Alphabet's investments in AI infrastructure, including custom chips from Nvidia and AMD, position it as a full-stack AI company. The company's focus on cloud infrastructure, large language models like Gemini, and cloud-based AI applications for productivity improvements should set it up for robust long-term growth.
In conclusion, with the S&P 500 and tech stocks poised for a strong 2026, buying Advanced Micro Devices and Alphabet now could be a smart move, as they are likely to skyrocket in the coming year.
