Chicago, IL – December 3, 2025– Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Apple AAPL and Tesla TSLA.
Last month’s volatility brought a bit more than a 5% decline in the major indices, but the real damage occurred beneath the surface, where speculative pockets of the market corrected sharply. For now, it appears that phase of selling has passed.
Amid the volatility, a few stocks held up remarkably well, most notably Alphabet and Apple. Both spent the month pushing to new highs and continued accelerating as the market regained its footing over the last week. Stocks that show relative strength during weakness often reemerge as leaders in the next leg higher. In this case, Alphabet and Apple also demonstrated that Wall Street had severely underestimated their strategic position in the AI ecosystem.
Alphabet’s newest LLM, Gemini 3, impressed users with its reasoning ability. Even more important, the market finally grasped the significance of Alphabet’s TPU silicon. Apple, meanwhile, despite spending only a fraction of what other hyperscalers invest in AI infrastructure, remains the single most important platform for AI usage. How this went under the radar for so long is almost comical, but Apple is once again reasserting its dominance.
Looking ahead to the most compelling Magnificent 7 opportunities for 2025, one more name stands out: Tesla. The fundamentals are mixed with flat sales growth this year and a premium valuation, but the Optimus humanoid robot narrative has the potential to become a major upside catalyst. And anyone who follows Tesla closely knows the stock tends to trade in long, choppy basing patterns followed by explosive rallies. After several turbulent years and exceptionally wide swings, Tesla now looks technically poised for what could be a significant breakout.
Alphabet has shifted from perceived AI underdog to the industry’s first truly vertically integrated AI company, something it has been, but only recently has the market begun to fully appreciate. The turning point came when Google trained its latest LLM entirely on its own custom silicon, the Tensor Processing Units (TPUs). This marks a meaningful shift in the AI landscape and represents one of the first credible challenges to Nvidia’s dominance in training hardware and the broader development ecosystem.
Morgan Stanley underscored this point today, projecting that TPU-related revenue could reach $13 billion by 2027, adding roughly $0.40 per share to earnings. Analyst Brian Nowak noted a significant upward revision in unit forecasts: about 5 million TPUs expected in 2027 and 7 million in 2028, compared with earlier estimates of 3 million and 3.2 million.
While most of this production will support Alphabet’s internal AI expansion and cloud workloads, the scale of the projected ramp, 12 million units over two years, signals clear commercial ambitions as enterprises accelerate their need for high-performance AI compute.
As shown in the chart below, GOOGL shares have been exceptionally strong, with price action again forming a new bull flag over the past week. A sustained move above $320 would confirm a technical breakout, positioning the stock well for continued strength into 2026.
Apple’s stock continues its relentless climb, hitting new all-time highs again today. Earlier this year, Apple was widely labeled an AI laggard, yet over the past several months it has completely reversed that narrative. The company has avoided the investor concerns weighing on hyperscalers over massive AI infrastructure spending, while benefiting from a renewed understanding that Apple remains the dominant platform for real-world AI usage, thanks to its monopoly in mobile computers and its custom M-series silicon computers.
Concerns about slowing iPhone demand have also faded. Recent results showed stronger-than-expected unit trends, and every major business segment is now back to growth. The M-series Macs continue to lead the industry in performance and efficiency, and Apple’s services division, its highest margin and fastest growing business, has surpassed 1 billion users. While revenue growth is running in the high single digits, earnings growth is accelerating into the low double digits, reflecting continued operating leverage.
Despite its recent surge, Apple has actually been a relative laggard year-to-date, which may prove constructive heading into 2026. With strong fundamental tailwinds and large institutions likely to rotate back into underperforming mega-cap leaders, Apple appears well positioned for a strong year ahead.
Tesla has become the black sheep of the Magnificent 7, weighed down by Elon Musk’s polarizing public profile and a clear slowdown in vehicle sales growth. Yet while the automotive business has struggled, Musk’s broader ecosystem, particularly xAI and the privately held X platform, continues to gain traction. And true to form, Musk is channeling his energy into what may be the most ambitious opportunity of his career: humanoid robots.
This morning, Michael Burry resurfaced his Tesla short, calling the stock “ridiculously overvalued.” History, however, has not been kind to Tesla bears. Even Jim Chanos, one of the most respected short sellers in the world, never profited from his long-running Tesla short. The more important point is that the humanoid robotics narrative is likely to become a major market theme heading into 2026.
Early hints of it emerged this year, but the technology is advancing rapidly. Musk often unveils products early, but if Tesla succeeds in bringing a capable humanoid robot to market, the implications for the company and the broader economy, are unfathomable. Under that scenario, Tesla could plausibly challenge for the title of the world’s most valuable company.
Technically, Tesla is setting up in classic fashion. The stock tends to trade in long, volatile boom-bust cycles. After an extraordinary rally from 2020–2022, it has spent the last few years in a broad consolidation phase. That basing pattern is now resolving, with shares approaching record highs. A decisive breakout above this range would be a significant technical signal and could trigger a powerful upside move.
Side note: In a recent interview, Musk also remarked that he believes Alphabet “is going to be pretty valuable in the future,” underscoring his recognition of the shifting AI landscape and the growing importance of the company’s role.
Taken together, Alphabet, Apple, and Tesla represent three very different but equally compelling setups heading into 2026. Alphabet is benefiting from a structural re-rating as investors finally appreciate the significance of its TPU leadership and fully integrated AI stack. Apple has quietly reclaimed its position as a dominant platform while delivering steady growth, expanding margins, and new product momentum. Tesla, despite controversy and mixed fundamentals, is approaching a major technical inflection point just as the humanoid robot narrative gains credibility.
Each stock has its own risks, but all three offer strong catalysts and improving technical trends. For investors seeking exposure to the next phase of AI-driven market leadership, GOOGL, AAPL, and TSLA remain among the most attractive opportunities within the Magnificent 7.
Free: Instant Access to Zacks’ Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P’s +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit /performancefor information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
