In a strong year for technology stocks, two notable S&P 500 components are leading the charge with exceptional performances in 2025, positioning them well for further gains as the new year approaches. As of October 2025, the current bull market has marked its third anniversary, and market strategist Ryan Detrick from Carson Group highlights that past trends suggest a three-year bull market is likely to extend to an average of eight years. This forecast is buoyed by robust earnings growth within the tech sector.
The enthusiasm among analysts is reflected in predictions from HSBC, estimating that the S&P 500 index could reach 7,500, spurred by ongoing investments in artificial intelligence (AI) infrastructure. The tech-heavy Nasdaq Composite has enjoyed a remarkable 22% increase this year, demonstrating a prevailing optimism that is expected to carry into 2026 during a broader market rally.
Investors seeking opportunities may want to consider two standout performers this year: Advanced Micro Devices (AMD) and Alphabet (GOOGL), both of which exhibit strong potential for continued momentum.
Advanced Micro Devices has seen its stock surge by 81% in 2025, significantly outperforming the PHLX Semiconductor Sector index, which gained 46%. AMD’s success is largely attributed to its expanding footprint in the AI data center market, where demand for its graphics processing units (GPUs) and server processors remains high. Recent contracts with industry giants including OpenAI, Oracle, and Microsoft signal an accelerating revenue stream, with AMD projecting an annual growth rate of over 60% in data center revenue for the next three to five years.
Additionally, AMD’s performance in personal computing has been stellar, with a 46% year-over-year revenue increase in the third quarter, driven by the rise of AI PCs and increased market share against competitors like Intel. Looking ahead, a surge in AI PC shipments is expected, further bolstering AMD’s prospects.
Analysts forecast AMD’s earnings growth rate will triple to around 62% in the coming year, with a predicted earnings per share of $6.44. Given its attractive valuation at 35 times forward earnings, below the tech sector’s average of 46, the stock presents a compelling opportunity for investors. Should AMD’s stock achieve alignment with industry averages, it could see a price increase to $296, signaling a potential 34% upside.
Similarly, Alphabet has posted impressive gains of 67% in 2025. The company’s growth trajectory is bolstered by significant investments in AI technologies, leading to a 16% year-over-year revenue increase to $102.3 billion, alongside a stellar 35% rise in earnings. Alphabet’s AI developments, including the Gemini app and enhanced search options, have amplified user engagement and presented new growth avenues, evident in widespread utilization of Google Search’s AI features.
The Google Cloud segment has also shown strong performance, reporting a 34% revenue increase year-over-year, with predictions for accelerated growth driven by a burgeoning cloud AI market set to quadruple in size over the next five years. Alphabet’s cloud infrastructure, powered by partnerships with firms like Nvidia and AMD, positions it favorably to capture significant market share. Moreover, the company is witnessing a noteworthy $155 billion backlog within its cloud business, reflecting strong future demand for AI-enabled services.
In summary, both Advanced Micro Devices and Alphabet appear to be well-prepared for ongoing success as both companies harness the growth potential associated with AI investments. As they continue to leverage their strengths and market positions, investing in these stocks now could yield significant returns in 2026 and beyond.
