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.

The post 2 dirt-cheap growth stocks to consider for a possible Santa Rally! appeared first on The Motley Fool UK.

Alphabet

What it does: Alphabet is a global technology company best known for Google, YouTube, Android, and cloud services.

By Mark Hartley. When considering an AI investment for the long term, Google’s parent company Alphabet (NASDAQ: GOOG) stands out. It has emerged as a key player in the AI space, leveraging its vast data resources and computational power to dig deep roots into the industry. Through DeepMind and its Gemini AI models, Alphabet is at the forefront of generative AI development. Google Cloud offers scalable AI tools and infrastructure for businesses, while AI enhancements in products like Search, Gmail, and YouTube are well-positioned to benefit from advertising revenue. 

Alphabet’s expansive ecosystem gives it a strategic advantage in training and deploying AI models at scale.

A significant risk, however, lies in the potential disruption of its core search business. As AI chatbots and generative search become more prevalent, traditional search advertising could face margin pressure. Additionally, if faces increased regulatory scrutiny on data usage, antitrust concerns and competition from rivals like Microsoft and Amazon.

Mark Hartley doesn’t own shares in any of the stocks mentioned.

Cellebrite

What it does: Cellebrite is the global leader in decrypting mobile phones and other devices supporting digital forensic investigations.

By Zaven Boyrazian. Many AI stocks today are unproven. That’s why I prefer established players leveraging AI to improve their existing mission-critical products like Cellebrite (NASDAQ:CLBT).

Cellebrite specialises in extracting encrypted data from mobile phones and other devices aiding law enforcement and enterprises in criminal and cybersecurity investigations. Over 90% of crime commited today has a digital element. And when it comes to decrypting mobile phones, Cellebrite is the global gold standard.

The company is now leveraging AI to analyse encrypted data – drastically accelerating a task that’s historically been increadibly labour intensive identifying patterns, discovering connections, and establishing leads.

Most of Cellebrite’s revenue comes from law enforcement, exposing Cellebrite to the risk of budget cuts. In fact, fears of lower US federal spending is why the stock dropped sharply in early 2025. And with a premium valuation, investors can expect more volatility moving forward. But in the long run, Cellebrite has what it takes to be an AI winner in my mind. That’s why I’ve already bought shares.

Zaven Boyrazian owns shares in Cellebrite.

Dell Technologies

What it does: Dell Technologies provides a broad range of IT products and services and is an influential player in AI.

By Royston Wild. Dell Technologies (NYSE:DELL) isn’t one of the more fashionable names in the realm of artificial intelligence (AI). The good news is that this means it trades at a whopping discount to many of its peers.

For this financial year (to January 2026), City analysts think earnings will soar 41% year on year, leaving it on a price-to-earnings (P/E) multiple of 12.6 times. Such readings are as rare as hen’s teeth in the high-growth tech industry.

In addition, Dell shares also trade on a price-to-earnings growth (PEG) ratio of 0.3 for this year. Any reading below 1 implies a share is undervalued.

These modest readings fail to reflect the exceptional progress the company’s making in AI, in my opinion. Indeed, Dell last month raised guidance for the current quarter as it announced “unprecedented demand for our AI-optimised servers” during January-March.

It booked $12.1bn in AI orders in the last quarter alone, beating the entire total for the last financial year. Dell is a major supplier of server infrastructure that let Nvidia’s high-power chips do their thing.

Dell’s shares could sink if unfavourable developments in the ongoing tariff wars transpire. But the company’s low valuation could help limit the scale of any falls.

Royston Wild does not own shares in Dell or Nvidia.

Salesforce

What it does: Salesforce is a customer relationship management (CRM) software company that is developing AI agents. 

By Edward Sheldon, CFA. We’ve all seen the potential of artificial intelligence (AI) in recent years. Using apps like ChatGPT and Gemini, we can do a lot of amazing things today. These apps are just the start of the AI story, however. I expect the next chapter to be about AI agents – software programmes that can complete tasks autonomously and increase business productivity exponentially. 

One company that is active in this space is Salesforce (NYSE: CRM). It’s a CRM software company that has recently developed an agentic AI offering for businesses called ‘Agentforce’. It’s still early days here. But already the company is having a lot of success with this offering, having signed up 8,000 customers since the product’s launch last October. 

Now, Salesforce is not the only company developing AI agents. So, competition from rivals is a risk. I like the fact that the company’s software is already embedded in over 150,000 organisations worldwide though. This could potentially give it a major competitive advantage in the agentic AI race.  

Edward Sheldon has positions in Salesforce.

Salesforce

What it does: Salesforce is a cloud-based software company specialising in customer relationship management, helping businesses manage sales, marketing, support, and data.

By Ben McPoland. I think Salefsforce (NYSE: CRM) looks well set up to benefit in the age of AI. Specifically, its Agentforce platform, which lets businesses deploy AI agents to handle various tasks, could be the company’s next big growth engine. 

By the end of April, it had already closed over 8,000 deals, just six months after launching Agentforce. Half of those were paid deals, taking its combined data cloud and AI annual recurring revenue above $1bn.

Granted, that looks like small potatoes set against the $41.2bn in sales it’s expected to generate this fiscal year. But it’s still very early days, and management reckons the digital labour market opportunity could run into the trillions of dollars.

Of course, it’s always best to treat such mind-boggling projections with a healthy dose of scepticism. And the company does face stiff competition in the AI agent space, especially from Microsoft and ServiceNow.

Nevertheless, I’m bullish here. Salesforce is already deeply embedded in sales, service, and marketing. Its AI agents slot into existing workflows, which I think will prove to be a big advantage over unproven AI upstarts.

Ben McPoland owns shares of Salesforce. 

The post 5 AI stocks to consider buying and holding for the long term appeared first on The Motley Fool UK.

So here I’ll identify three great shares to consider buying today. With exposure to various industries and regions, they allow investors to achieve effective diversification — and with it the benefits of risk management and greater opportunities for wealth creation — that this provides.

With a mix of growth, dividend and value shares, this mini portfolio offers added advantages to stock pickers. Growth shares can rise strongly in price if earnings continue to soar. Meanwhile, value stocks can also deliver robust capital gains as the market becomes aware of their cheapness. And dividend shares provide a steady flow of passive income.

Growth

The S&P 500 is packed with high-growth technology shares. But the elevated valuations of many of these leave them in danger of further share price weakness.

However, the cheapness of Dell Technologies (NYSE:DELL) leaves it (in my opinion) at less risk than other more expensive tech businesses. Its forward price-to-earnings (P/E) ratio sits at just 10.3 times.

By marketing a broad range of computer services and products, Dell shares provide multiple ways for investors to capitalise on the booming digital economy. I’m especially encouraged by its potential in the field of artificial intelligence (AI) — it’s expecting AI server sales of $15bn this financial year alone.

City analysts think total earnings will soar 110% in the 12 months to January 2026.

Value

Adding the iShares S&P 500 Value ETF (LSE:0JFT) to a portfolio has two significant advantages. Firstly, as an exchange-traded fund (ETF) it invests in a basket of assets, providing extra diversification benefits. Today, the fund has holdings in 398 US companies.

Secondly, it provides “exposure to large US companies that are potentially undervalued relative to comparable companies“. This can provide superior capital gains potential than a standard S&P 500-related ETF.

The cheapness of the fund can be seen in the following table:

Be aware however, that this value ETF is denominated in US dollars. This can leave investors more exposed to unfavourable movements on forex markets.

Dividends

Real estate investment trusts (REITs) like Crown Castle International (NYSE:CCI) can be excellent long-term dividend providers. Under REIT rules, annual dividends need to equate to at least 90% of profits from their rental operations.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

This doesn’t theoretically make them reliable dividend payers from one year to another. During tough economic times, earnings can suffer if they have problems collecting rents and/or occupancy issues arise.

However, Crown Castle’s focus on the defensive telecommunications industry substantially reduces this risk. The business provides shared communications infrastructure, including 40,000 cell towers across the country and around 85,000 miles of fibre.

The dividend yield here is a healthy 4.7%. I think it’s a top REIT to consider despite the problem of rising costs.

The post Here’s a starter portfolio of S&P 500 shares to consider for growth, dividends and value! appeared first on The Motley Fool UK.

Now analysts are eyeing a recovery following news that the Trump administration may ease tariffs this week. The result could be great news for stocks that had a tough start to the year and are now trading at a discount.

For UK investors looking to add some diversity to their ISA this April, here are two promising US growth stocks to consider.

Uber Technologies

The ride-hailing and food delivery platform Uber (NYSE: UBER) is more often in the news for controversy than its stock performance. Yet despite several security issues — including data breaches and safety concerns — it remains the most popular ride-hailing app in the world.

Founded in 2009 and headquartered in San Francisco, its operations span across the Americas, Europe, the Middle East, Africa and the Asia Pacific.

The stock’s currently trading around $76, up 180% after five years of volatile price action. Investors who caught the $20 low in mid-2022 would have almost quadrupled their investment by now.

But several ongoing risks threaten continued volatility. Regulatory challenges are a key issue, with some regions attempting to ban the app on grounds of unfair competition. It also faces stiff competition from a plethora of lower-priced rivals like Bolt.

By adding additional revenue streams like food and freight delivery, Uber has successfully expanded its business. Adding to this is its recent partnerships with autonomous vehicle companies like Waymo, positioning it to benefit from the robo-taxi market.

Analysts expect revenue to reach $50bn by the end of 2025, with an average 12-month price target of $90.

Dell Technologies

Dell‘s (NYSE: DELL) a well-recognised name in the tech world, providing a broad range of IT products and services. The multinational tech giant sells everything from personal computers and servers to storage systems and networking products. Its varied customer base includes individual consumers, small businesses and large enterprises.

The stock currently trades at around $100 a share, up 410% in the past five years. Lately, performance has been underwhelming, with the stock down 44% from its May 2024 all-time high of $180.

Despite moderate revenue growth, it has struggled recently with declining profit margins. This has been attributed to the high costs associated with artificial intelligence (AI) server components like Nvidia GPUs. Competition from other major players in the AI-server market is also threatening its market share and profitability.

In its fiscal fourth quarter ended January, Dell reported an 18% increase in adjusted earnings of $2.68 per share and a 7% revenue increase to $23.93bn. This surpassed earnings expectations but fell short of sales projections.

Demand for AI infrastructure has been a key driver of growth recently, with Dell enjoying significant interest in its servers and networking segment. Reports indicate the company’s AI server backlog is around $9bn.

The growth’s reflected in its annual cash dividend, which climbed 18% this year, supported by a $10bn share buyback programme. These developments reinforce the company’s commitment to returning value to shareholders.

Analysts are overwhelmingly optimistic about the stock, expecting an average 36.5% increase in the coming 12 months.

The post 2 fantastic US growth stocks to consider for a fresh ISA this April appeared first on The Motley Fool UK.

If someone had invested invested £30k 10 years ago, how much would they have now?

Strong returns

Since 9 December 2014, the S&P 500 has risen an impressive 196% in value. That equates to an average annual return of 11.4%.

But that’s not including dividends paid out during this time. With shareholder payouts included, the index’s average yearly return rises to an impressive 13.7%.

To put that into context, the average annual returns (including dividends) of the FTSE 100 and FTSE 250 sit way back, at just above and below 6%, respectively.

So how much would the S&P 500’s strong performance have delivered in cash terms? Had someone invested £30,000 in an S&P 500 index fund back in late 2014, they could now — with dividends reinvested — be sitting on a whopping £117,148.

Tech focus

The largest companies in the US index are tech companies, a sector that is not well represented in the UK. And I think these tech giants will continue to push the S&P 500 higher.

These businesses have soared in value amid investor buzz over the evolving digital landscape. More recently, market excitement over artificial intelligence (AI) — helped by strong trading updates from Nvidia, Alphabet, and Microsoft — have boosted demand for their shares.

But AI isn’t the only game in town. There’s a multitude of other tech growth segments that could lift the S&P over the long term, including:

• Cloud computing
• Green technology (including renewable energy and electric cars)
• Robotics
• Cybersecurity
• Quantum computing
• The Internet of Things (IoT)
• Autonomous vehicles

A top stock I’m considering

To capitalise on these themes myself, I’ve added a couple of US exchange-traded funds (ETFs) to my portfolio.

One is the broader HSBC S&P 500 ETF, giving me exposure to the whole index. The other is the iShares S&P 500 Information Technology Sector ETF, which gives me more targeted access to tech stocks.

With my quest for diversification achieved, I’m also looking to boost my returns by buying some individual shares. Dell Technologies (NYSE:DELL) is one US share I’m considering today.

Like Nvidia, the business is also betting big on the AI revolution. But so far it hasn’t enjoyed the same spectacular results, and so it doesn’t have the same sky-high valuation as its tech rival.

Dell’s forward price-to-earnings (P/E) ratio is 15.8 times. That’s pretty low compared to the broader tech sector and well below the Nvidia’s hulking ratio of 47.1 times.

It may not be achieving the same spectacular results as Nvidia just yet, but it has been making serious progress in AI.

Between September 2023 and June, it sold an impressive $3bn worth of AI servers. And it reached a significant milestone in November by selling Blackwell server racks, the first that use liquid cooling technology. This could be a game-changer in energy efficiency and server performance.

Although Dell faces substantial competition in the AI space, I believe it’s an attractive stock for me given its encouraging recent progress — and especially at current prices.

The post If an investor put £30,000 into the S&P 500 a decade ago, here’s what they’d have today! appeared first on The Motley Fool UK.

A top stock

The buzz around artificial intelligence (AI) has powered the S&P 500 through the roof over the past year. The likes of Nvidia, Microsoft and Alphabet have all risen on early signs of success in this new tech frontier.

However, I haven’t been tempted to buy these shares due to their whopping valuations. I’m concerned their high price-to-earnings (P/E) multiples could prompt sharp price reversals if confidence in AI profitability starts to weaken.

This is why Dell Technologies (NYSE:DELL) might be a better buy for me today. The semiconductor manufacturer trades on a forward P/E ratio of just 16.5 times. That’s far lower than the reading of 47.9 times for Nvidia shares.

On the downside, group earnings could be dragged down by disappointing sales of its PCs, laptops and other hardware. This has been a major problem at the business of late.

However, Dell’s progress in AI’s helping to offset problems here, and customer demand’s going from strength to strength. The firm shipped $3bn worth of AI servers between September 2023 and June.

With hardware sales also showing signs of stabilising, now could be time to consider investing.

Dell believes that its full-stack AI solutions (spanning client devices, storage, networking, servers and data protection) will simplify and speed up client adoption and drive sales through the roof. Industry tie-ups (like its Dell AI Factory with Nvidia programme launched in March) could prove pivotal in helping it achieve this.

Dell faces a lot of competition. But at current prices, I think it’s an attractive way to play the AI theme.

A great ETF

Investing in specific shares like Dell can help individuals make a market-beating return. However, holding a smaller pool of companies exposes investors to a higher level of risk.

Investors can get around this by buying shares in a tracker fund. One such instrument on my radar is the iShares S&P 500 Industrials Sector ETF (LSE:IUIS).

As the name implies, this exchange-traded fund (ETF) focuses on industrial shares like GE Aerospace, Caterpillar, RTX and Uber. In total it has holdings in 78 different companies, and since its founding in 2017, it’s delivered an average annual return of 11.1%.

I think a basket of cyclical shares like this one could outperform the broader S&P 500 if — as expected — the Federal Reserve continues to slash interest rates, boosting economic activity. That’s why it’s on my radar right now.

Remember though, the opposite is also true. And with the ETF carrying a high P/E ratio of 26.8 times, it could sink in value if the mood music around the economy and interest rate movements sours.

On balance, I think this iShares product — along with Dell shares — could be great additions to my portfolio this November.

The post A top S&P 500 growth share and an ETF I’d buy this November! appeared first on The Motley Fool UK.

Growth stocks are typically at the forefront of innovation and can capitalise on new trends and consumer habits, leading to substantial profits and consequently share price growth.

Dividend stocks, meanwhile, have less capital gains potential. But they are are often less volatile, and can provide a steady return across all points of the economic cycle.

With this in mind, here are two of my favourite US stocks from each category.

Growth

Dell Technologies (NYSE:DELL) has been providing computer hardware and software for 40 years. And now it is looking to artificial intelligence (AI) to take sales to the next level.

To capture this, it is investing vast sums to provide full-stack AI solutions covering the fields of client devices, servers, storage, data protection, and networking.

As part of this drive, it recently launched Dell Factory with Nvidia, which uses the latter’s technologies to provide bespoke or full-fat products and services to speed up company adoption of AI.

It is also providing servers for xAI’s planned supercomputer, according to the startup’s founder, Elon Musk.

I like Dell shares because of their cheapness compared with many other AI stocks. It trades on a forward price-to-earnings (P/E) ratio of around 16 times, even after recent gains. This compares favourably with most other tech stocks (Nvidia, for instance, trades on a multiple of 43.4 times).

It’s early days, so predicting the eventual winner(s) of the AI wars is a tough task. But the ambitious steps Dell is making may make it one of the sector’s leading lights.

Dividends

Drinks giant The Coca-Cola Company (NYSE:KO) is one of the world’s true Dividend Aristocrats. Shareholder payouts here have risen every year for a staggering 62 years.

This is thanks to the exceptional brand power of Coke and its many other soft drinks labels. They stay in high demand at all points of the economic cycle. Even during tough times, prices on these goods can be hiked to help the company offset costs and grow earnings.

Intense competition across all its categories is a threat. However, the huge investment Coca-Cola makes in marketing and product innovation means it currently remains one step ahead of the pack.

This year it launched Coca-Cola Spiced in the US and Canada to exploit surging consumer demand for spicier food and drinks.

City analysts expect dividends here to continue rising all the way through to 2026 at least. It means for this year the firm carries a healthy 3% dividend yield, supported by an expected 14% earnings rise.

And for 2025 and 2026, the yield on Coca-Cola shares moves to 3.1% and 3.3% respectively. All three forward yields beat the S&P 500 average of 1.3% by a healthy distance.

The post 2 of the best US growth and dividend stocks to consider! appeared first on The Motley Fool UK.