Artificial intelligence (AI) is not just a technology trend, it's changing the language we live in. So investing in large AI companies over the long term can be a wise move.
Let's take a look at five AI stocks you can buy and hold over the next 10 years.
Image source: Getty Images.
1. nvidia
Regarding AI infrastructure, nvidia (NVDA) 1.06%)) He's a clear leader. Its graphics processing unit (GPU) is the main chip used to train and run AI workloads. The company gained more than 90% market share in the GPU market in the first quarter, but data center revenues have risen more than nine times over the past two years. This kind of growth from a $4.17 trillion company is almost unprecedented.
The company's wide moat comes from the CUDA software platform, which was pushed into universities and labs long before AI became mainstream. As a result, CUDA has become the main platform that developers have learned to program GPUs, and numerous libraries and tools have been built on top of the software to optimize the performance of AI chips.
Apart from AI, Nvidia's automotive segment is also experiencing strong growth. Revenue reached $567 million in the last quarter, and the company projected $5 billion a year. With the advent of autonomous driving, this could be another major growth step for future companies.
2. Taiwan Semiconductor Manufacturing
Today, most chip manufacturers don't produce their own chips. They just design them. That's here Taiwan Semiconductor Manufacturing (TSM) 3.42%)) Step in. It is one of the world's leading semiconductor contract manufacturers and manufactures chips for major chip designers such as Nvidia. Advanced Micro Devices, appleand Broadcom.
Advanced manufacturing chips are not an easy process as they require both scale and technical expertise. Foundries are constantly competing to reduce node size. The more transistors you can cram into the chip, the better the chip's performance and power efficiency.
TSMC has a wide range of leads in advanced node manufacturing. Chips and small nodes built at 7nm accounted for 73% of revenue in the last quarter, with 3nm chips alone accounting for 22%. Apple is already locked into future supply of the 2nm line.
As rivals struggled, TSMC became an important partner in leading chip designers. This gives chip designers the ability to work closely with the company to ensure future capabilities and meet the growing demand for advanced chips.
3. ASML
TSMC manufactures advanced chips, ASML (ASML) -1.31%)) We are a company that provides equipment that makes this possible. It fluctuates almost entirely into extreme UV lithography. This is the technology used to manufacture advanced chips.
ASML's business is driven by the capital expenditures of chip makers. TSMC and Intel ASML, which plans to invest hundreds of billions of billions in new capacity, will benefit. So long as demand for advanced chips continues to rise, solid demand should continue to move forward.
The company recently introduced a new technology called high-value aperture extreme ultraviolet rock imaging system, or high-Na EUV. This technology helps to further reduce chip size. TSMC balked at a price tag of nearly $400 million for these machines, but last quarter it shipped its fifth highest NA EUV system. Currently, there are machines located in three largest semiconductor contract manufacturers, and none of them would want to fall behind.
ASML, a company considering designing more powerful AI chips in the future, appears to be well-placed in the long run.
4. Meta Platform
Meta Platform (Meta) -0.23%)) It owns one of the world's most powerful digital advertising platforms, and AI is improving it. Its Llama model has increased personalization and engagement across Facebook and Instagram, which drives strong revenue growth. In the first quarter, AD impressions rose 5% and pricing rose 10%. This is a strong indication that users are spending more time on the app and advertisers are getting more value from the platform.
Meta's new AI tools help marketers generate better creative content and target users more effectively. This will improve your campaign, increase your ad spend returns, and allow advertisers to return. Meta also invests heavily in AI infrastructure, further enhancing performance and costs.
The company is also beginning to offer ads on both messaging platform WhatsApp and on threads, a new social media site. WhatsApp has over 3 billion users, with threads already reaching 350 million. So both have long runways with advertising growth ahead.
Overall, meta appears to be suitable for the AI world.
5. alphabet
alphabet's (googl 0.36%)) (googl 0.36%)) Moats should not be underestimated. Investors fear that AI will disrupt the core search business, but investors are missing out on what Google really does. Google is not about search. It's about content discovery and whether it's provided by traditional search or AI, the company has some major advantages.
The greatest advantage is its distribution. Its Chrome browser has a browser market share of over 65%, and the Android operating system runs on over 70% of smartphones. It is also the default search engine for Apple devices, and is also the partner with other browsers Opera. The company also has decades of user search data and the world's largest ad network, with unprecedented scale and reach.
Importantly, Google integrates AI into products that already use it. A new AI mode during searching will turn Google into an AI assistant, not just a list of links. recently Oppenheimer In the survey, 82% of users found it more useful than traditional searches, while 75% said it was more useful than ChatGPT. It's a strong signal that Google is doing this right.
Google Cloud, a cloud computing unit, is also gaining momentum. First quarter revenues increased 28%, with operating profit more than doubled. Cloud customers use Google's Vertex AI tools to train and deploy models. It has developed its own custom AI chip. This is even tested at Openai.
Waymo, on the other hand, is another undervalued asset. Currently running over 250,000 paid Robotaxi rides a week and is beginning to expand into new markets Uber partnership. Alphabet's Willow Quantum chip also shows true advances in reducing error rates. This may take years, but it could be another growth engine for the future.
Overall, with the combination of big businesses and startups, Alphabet looks like one of the best AI stocks to own in the long term.
Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet and Opera. Motley Fool has positions and recommendations from ASML, Advanced Micro Devices, Alphabet, Apple, Intel, Meta Platforms, Nvidia, Taiwan Semiconductor Manufacturing and Uber Technologies. Motley Fool recommends Broadcom and the following options are recommended: Motley Fools have a disclosure policy.
