I Think These Are the 3 Best AI Stocks to Buy in December

Core Insights - The article emphasizes that the best investment opportunities in the AI sector may be found in well-known dominant players rather than hidden gems, particularly as AI spending is expected to accelerate through 2026 Group 1: Nvidia - Nvidia reported a revenue of $57 billion in the fiscal third quarter, marking a 62% year-over-year increase, with data center sales reaching $51.2 billion [2] - The company has a projected revenue visibility of $500 billion from Blackwell and Rubin chips through the end of 2026, with fourth-quarter guidance of $65 billion indicating sustained momentum [3][4] - Nvidia's gross margin is above 73%, and it has a forward P/E ratio around 23, which is considered reasonable given its rapid revenue growth and $32 billion in quarterly net income [4] Group 2: Microsoft - Microsoft's Azure cloud platform experienced a 40% growth in the most recent quarter, contributing to intelligent cloud segment revenue of $30.9 billion, up 28% year-over-year [5][7] - The company's commercial remaining performance obligations surged 51% to $392 billion, indicating strong future revenue potential [7] - Microsoft trades at roughly 31 times forward earnings, providing a diversified AI exposure with lower volatility compared to pure-play chipmakers [7] Group 3: Advanced Micro Devices (AMD) - AMD reported record revenue of $9.2 billion, a 36% increase year-over-year, with data center sales climbing 22% to $4.3 billion [8] - The company announced a strategic partnership with OpenAI to deploy 6 gigawatts of AMD Instinct GPUs, with the first deployment of MI450 accelerators set for the second half of 2026 [9][10] - AMD trades at approximately 35 times forward earnings, which is a premium to the broader market but offers potential for multiple expansions due to its faster expected growth rate [10] Group 4: Overall AI Infrastructure - The three companies—Nvidia, Microsoft, and AMD—represent essential layers of AI infrastructure, with Nvidia leading in training and high-performance inference, Microsoft in enterprise deployment, and AMD providing competitive pressure [11] - Together, these companies offer diversified exposure to a significant technology investment cycle, potentially the most impactful since the internet [12]