Line an 8x8-inch baking pan with parchment paper.
Add the sweetened condensed milk, white chocolate chips, butter, and peppermint extract to a large microwave-safe bowl.
14 ounces sweetened condensed milk, 3 cups white chocolate chips, 2 tablespoons unsalted butter, ½ teaspoon pure peppermint extract
Microwave for 30 seconds. Stir and then heat for another 30 seconds. Continue heating and stirring until the white chocolate chips and butter have completely melted, about 2-3 minutes.
Remove ½ cup of fudge to a small bowl and stir in the red food coloring.
½ teaspoon red gel food coloring
Remove another ½ cup of fudge to a different bowl and stir in the green food coloring.
½ teaspoon green gel food coloring
Dollop the white, red, and green fudge around the pan and swirl it gently with a spoon, if desired. Top with festive sprinkles, if using.
2 tablespoons holiday-themed sprinkles
Transfer the fudge to the fridge and allow it to chill for at least 2 hours or until completely set.