Best Tech Stocks for December 2025: Why I’m Overweight and Not Apologizing

Tech’s up 19.2% through November while the S&P sits at 14.8%. If you’re still hiding in value stocks waiting for “safety,” you’re missing the point entirely.

I’ve been trading tech since the dot-com crash. Back then, companies burned through millions on Super Bowl ads while generating zero revenue. This isn’t that. These are profitable monsters with competitive moats so wide you can’t see across them.

The AI revolution isn’t coming, it’s already showing up in earnings statements. But not every stock with “AI” in the pitch deck deserves your money.

What Actually Changed My Mind on Tech Allocation

In July, I had about 18% of my portfolio in tech. Standard diversification, nothing crazy. By November, I’m sitting at 28%.

Why? Because the earnings kept coming in and the market kept getting surprised. When Microsoft reports that AI alone is adding 20 percentage points to Azure’s 37% growth, that’s not hype, that’s revenue you can track.

I’m not comfortable being this concentrated in one sector. But I’m more uncomfortable watching the biggest wealth creation event in 50 years from the sidelines because I wanted to feel “balanced.”

The Information Gain Problem with Tech Lists

Here’s my issue with most “Best Tech Stocks” articles, they’re identical. Everyone lists the same seven mega-caps, uses the same Yahoo Finance stats, and calls it analysis.

So I’m doing something different. Each stock below includes:

• My conviction score (1-10 scale combining valuation, growth trajectory, and competitive position)
• What changed since my last assessment
• One specific risk I’m actually worried about

This isn’t comprehensive. It’s opinionated. That’s the point.

The AI Infrastructure Layer

Nvidia (NVDA)

Conviction Score: 8/10

Every data center getting built needs Nvidia chips. Every AI model runs on their architecture. Every autonomous vehicle project depends on their platforms.

The software moat is what people miss. You can’t just swap GPUs like you’re changing RAM, the entire development stack locks you in. That’s why customers stay even when competitors offer cheaper alternatives.

What changed: Volatility picked up in November with sector rotation fears, but order backlogs are still measured in quarters, not weeks. The demand story hasn’t cracked.

The risk I’m watching: They’re trading at premium multiples during a period where any macro hiccup could trigger 20% drawdowns. This isn’t a “set and forget” position, you need to actively manage it.

Taiwan Semiconductor (TSM)

Conviction Score: 7/10

50%+ market share in contract chip manufacturing. They make the processors in your iPhone and the chips running AI servers.

This is the boring infrastructure play that actually makes money while everyone argues about geopolitics. Western demand alone supports their growth for the next decade.

What changed: Nothing dramatic. They keep executing while the market worries about Taiwan tensions that haven’t materialized.

The risk I’m watching: Geopolitical risk isn’t zero just because it hasn’t happened yet. But at current valuations, a lot of worst-case scenarios are already priced in.

The Platform Dominators

Microsoft (MSFT)

Conviction Score: 9/10

Azure jumped 37% last quarter with AI contributing 20 percentage points to that growth. Their OpenAI partnership is printing money exactly as planned.

What I love: They own the enterprise relationship AND the AI platform. You can copy their product features, but you can’t copy 30 years of IT department relationships.

Azure OpenAI now has 68% of Fortune 500 companies as customers. That’s not a technology moat, that’s an organizational moat.

What changed: I upgraded this from a 7 to a 9 in September after the earnings call made it clear AI revenue isn’t just “contributing,” it’s becoming the growth engine.

The risk I’m watching: They’re the consensus pick. When 32 of 33 analysts rate something a buy with $650+ targets, you’re not getting contrarian value. You’re paying for certainty.

Palantir (PLTR)

Conviction Score: 6/10

I was wrong about Palantir for too long. Up 145% this year, and I kept waiting for “reasonable valuation” that never came.

They crossed $1.4 billion in quarterly revenue with 52% growth. Commercial revenue hit $380 million and government contracts keep expanding. They became the operating system for how large organizations make decisions with data.

What changed: I stopped fighting the valuation in October. Trading at 265X forward earnings is insane until you realize they’re growing 52% annually AND accelerating. Sometimes you pay up for compounding excellence.

The risk I’m watching: At these multiples, any growth deceleration gets punished brutally. This is my smallest tech position for exactly that reason.

The Mega-Cap Diversifiers

Alphabet (GOOGL)

Conviction Score: 8/10

Search still prints cash while they spend nearly $100 billion on AI infrastructure. Their cloud business is legitimately challenging AWS and Azure now.

I like companies where the cash-generating core business funds the experiments. Startups stress about runway. Google thinks in decades.

What changed: Cloud growth accelerated faster than expected in Q3. This isn’t just “keeping up” anymore, they’re winning deals.

The risk I’m watching: Regulatory pressure is real. DOJ antitrust cases could force structural changes nobody’s pricing in yet.

Meta (META)

Conviction Score: 7/10

Everyone wrote Meta off during the metaverse disaster. Then they quietly pivoted to AI and efficiency while nobody was paying attention.

Their AI investments are showing up in core advertising through better targeting and engagement. Meanwhile, they’re sitting on the largest social platform in the world generating cash flows that fund serious AI research.

What changed: The sentiment flip happened in early 2025, but the operational execution is what convinced me. They’re not just cutting costs, they’re redeploying capital better.

The risk I’m watching: Doesn’t have the growth multiples of others on this list. If you’re purely chasing momentum, this isn’t the play. But value + cash flow + AI upside is compelling at current levels.

The Wild Cards (Smaller Positions)

Tesla (TSLA)

Conviction Score: 4/10

High-risk, high-reward lottery ticket. Robotaxis are expanding, and if Full Self-Driving works at scale, every other car company becomes irrelevant overnight.

What changed: Nothing. This has been a small position for months and it stays that way.

The risk I’m watching: Execution risk is massive. Autonomous driving is harder than anyone predicted, competition is heating up, and they’re burning cash on hardware bets that might not pay off.

Don’t bet more than you can afford to lose entirely.

Amazon (AMZN)

Conviction Score: 8/10

AWS is the backbone of the internet and their AI services are gaining enterprise traction. Plus warehouse automation and drone delivery tie into the broader efficiency theme.

Not flashy, but sometimes steady excellence beats wild swings. AWS margins are beautiful and the business keeps growing while funding experiments everywhere else.

What changed: They’re integrating AI into AWS in ways that create incremental revenue without cannibalizing existing services. That’s rare.

The risk I’m watching: Retail margin compression if the economy softens. AWS hides a lot of retail problems, but it won’t hide everything.

The One Stock I’m Avoiding: Snowflake (SNOW)

Everyone’s excited about Snowflake’s data cloud platform. Growth is real, customer base is expanding, use cases are solid.

But revenue growth decelerated from 48% to 29% year-over-year while they’re still trading at 11X sales. The market’s pricing in perfection when execution is clearly slowing.

When high-multiple growth stocks show deceleration, they get destroyed. I’m not interested in catching that knife.

My Actual Position Sizing

I’m at 28% tech allocation broken down like this:

• 40% in mega-caps (MSFT, GOOGL, NVDA) – the safe boring plays
• 35% in platform winners (MSFT again, AMZN) – where I have highest conviction
• 20% in growth stories (PLTR, META) – higher risk but justified
• 5% in wild cards (TSLA) – lottery tickets I can afford to lose

This isn’t sector rotation. This is wealth creation happening in real-time while most investors sit paralyzed by valuation concerns.

Valuation Reality

Tech valuations are stretched, I’m not pretending otherwise. We’re seeing multiples that would’ve been laughable five years ago.

But when you’re dealing with companies growing 35-55% annually in markets expanding faster than that, traditional P/E ratios break down. The question isn’t “is it expensive,” the question is “can they grow into it.”

Strong management teams that execute, expanding markets, genuine competitive moats. That’s what justifies premium multiples. Everything else is just noise.

What I’m Doing in December

Adding on weakness, trimming on euphoria. Nothing dramatic.

We’ve had dips that looked terrifying followed by earnings that pushed everything to new highs. That’s normal for tech. Periods of doubt, explosive rebounds, repeat.

The AI transformation isn’t hype. It’s showing up in quarterly numbers. If you’re waiting for “better valuations,” you’ll be waiting for years while the opportunity passes.

Standard disclaimers: Not a financial advisor, this isn’t advice, you could lose money, do your own research, consult professionals, etc. Tech stocks are volatile and valuations are high. But sometimes real innovation creates real opportunities.