Santa Claus Rally Ahead? 3 Stocks That Could Pop Before 2025 Ends

In the final stretch of the year, investors often look for signs of the Santa Claus Rally, a seasonal pattern wherein stocks tend to rise in the period from Dec. 24 to Jan. 5.

This pattern has historically favored stocks exhibiting strong momentum, improving fundamentals and increased investor interest. Strong year-end earnings and holiday season sales often lift stock prices, as investors rush in and push valuations higher. This year, however, a distinct rally is harder to spot because markets have already posted strong gains. The S&P 500, one of the world’s most important stock indexes, is up nearly 20% so far this year and has gained about 1.6% over the past month.

With AI infrastructure, cloud computing and GPU demand still dominating investor focus, strong technology players appear well-positioned to ride any late-December upside into 2026. Additionally, as AI-driven data growth accelerates and network infrastructure spending expands, storage and optical networking companies equally emerge as late-year momentum candidates. In this context, here are three stocks showing momentum that could pop before the year ends — NVIDIA Corporation NVDA, Sandisk Corporation SNDK and Ciena Corporation CIEN.

Top 3 Stocks That Could Ride a Santa Rally

NVIDIA remains the backbone of the global AI build-out, and the stock is among the strongest performers in the market. NVIDIA benefits from strong demand for AI and accelerated computing, driven by generative AI and large language models running on its Hopper and Blackwell GPUs. Its healthy cash position supports growth investments, acquisitions and shareholder returns. However, limited Blackwell supply and rising AI system costs could weigh on margins.

The Zacks Consensus Estimate for current-year earnings has moved up 4.2% over the past 60 days to $4.65. The stock has gained 4.5% in the past month. NVDA currently flaunts a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

Sandisk is riding the storage momentum on AI data growth. It is emerging as a strong year-end play on exploding data creation, driven by AI workloads, cloud expansion and enterprise storage refresh cycles. As storage becomes a critical bottleneck in AI infrastructure, SNDK’s exposure to NAND flash and high-performance storage solutions positions it well for renewed investor interest.  Surging AI and data center investments are boosting demand for SNDK’s high-capacity, energy-efficient BiCS8 SSDs, which are scaling rapidly and expected to dominate bit production by the end of fiscal 2026.

The Zacks Consensus Estimate for SNDK’s fiscal 2026 earnings has been pegged at $12.59, indicating year-over-year growth of 321%, which has been revised upward 99.5% in the past 60 days. In the past month, its shares have surged 16.1%. SNDK currently boasts a Zacks Rank #1.

As AI workloads increase data traffic within and between data centers, demand for optical networking is rising, benefiting Ciena. Its Cloud and Service Provider customers are prioritizing network investments to support AI-driven traffic growth, highlighting long-term opportunities for its Systems and Interconnects businesses. To capitalize on this, it is focusing R&D on Coherent Optical Systems, Interconnects, Coherent Routing and solutions like DCOM, while scaling back investments in residential broadband. CIEN expects its total addressable market to reach $13 billion by 2028 at a CAGR of 26%. It faces near-term cost pressures but expects margins to improve by late fiscal 2026 through cost cuts, pricing actions and supply rebalancing.

The Zacks Consensus Estimate for CIEN’s fiscal 2026 earnings has been pegged at $5.15, indicating year-over-year growth of 95%, which has been revised upward 18% in the past 60 days. The stock has gained 20% in the past month. CIEN currently sports a Zacks Rank #1 and has a Value Score of B.

End Note

As always, Santa brings surprises, but strong momentum often leads the way.

NVIDIA offers stability and dominance, Sandisk provides AI-driven data storage leverage and Ciena delivers networking upside tied to the next phase of AI infrastructure buildout. If seasonal tailwinds kick in, these names are technically positioned to benefit, making them worth watching closely as markets head into the final stretch of 2025.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research