Stock markets are volatile right now as investors pull back from tech-based growth stocks. If history is any guide, though, we could be just around the corner from a fresh rally for global shares.
According to LPL Financial, December has been the second-best performing month of the year for the S&P 500 since 1950. What’s more, around 74% of Decembers since then have delivered positive returns.
Given the cheapness of some top growth shares today, I think there’s plenty of scope for a Santa Rally this year. Here are two great stocks from the S&P 500 and elsewhere that may surge next month.
A top AI stock
Dell Technologies (NYSE:DELL) lacks the hype of other AI stocks like Nvidia, Amazon, and Palantir. The good news is that investors can pick this information technology stock for a fraction of the cost of those other US shares.
Following recent price weakness, Dell shares trade on a forward price-to-earnings (P/E) ratio of 12.5 times. Compare that with the enormous earnings multiple of 41.3 times for Nvidia stock, for instance.
On top of this, at $120.75 per share, Dell’s P/E-to-growth (PEG) multiple is just 0.3. Any sub-1 reading indicates that a share is trading at a discount.
Like other AI stocks, Dell has seen its share drop recently over fears of a possible market bubble. Further drops can’t be ruled out in the days and weeks ahead.
However, the company’s low valuation versus the broader sector could help cushion it from a sharp sell-off.
I think Dell’s one of the dark horses of the AI stock sector. In its latest financial update in August, it reported “exceptional” demand for its AI solutions, and raised its full-year AI server shipment forecasts to a whopping $20bn.
A FTSE growth hero
The FTSE 100 isn’t famous for hosting some of the stock market’s hottest growth stocks. Those in the know can use this to pick up top stocks at cheap prices.
Take Sage Group (LSE:SGE), for instance. Annual earnings have risen at an average of 19% over the last three years.
Its share price has risen roughly 84% over the last five years. But it’s stumbled in 2025 due to fears over the global economy — it’s down by mid-teen percentages since 1 January, at £10.56 per share.
This leaves it looking dirt cheap in my opinion. With a forward P/E ratio of 22.7 times, it trades at a large discount to the broader European information technology sector (34.8 times).
Sage provides software that lets accountants, payroll staff, and human resources departments do their work effectively. The downside is that this sector is highly cyclical, leaving the FTSE company at risk during downturns.
Yet the long-term outlook here remains excellent, in my view. Not only does the company have enormous opportunities as businesses steadily digitalise their operations. It’s also been investing heavily in AI, a strategy that’s already paying off handsomely.
By bundling its Sage Copilot generative AI assistant into its products, pricing is up by roughly 5.5%. That’s up from 4% to 5% historically, and should continue rising as demand for AI applications ticks higher. Uptake is tipped to be especially high in Sage’s accounting and other markets given the importance of data accuracy.
Roughly 150,000 customers now use Sage Copilot, up from 40,000 just nine months ago.
