Important points
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Continued AI investment will lay the foundation for a potential multi-trillion dollar market by 2035.
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These companies have a strong grasp on key AI niches and also own stakes in privately held AI companies.
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Together, these five stocks offer AI opportunities in both hardware and software.
- 10 stocks we like better than Nvidia ›
All the aggressive investments in chips and data centers you've read or heard about are about laying the foundation for what's to come. The artificial intelligence (AI) market could grow from just over $270 billion today to more than $5.2 trillion over the next 10 years, according to research from Roots Analysis.
The biggest winners from AI may very well be companies that have yet to emerge, are still privately held, or are relatively unknown. That said, investors are starting to take a hard look at which of today's AI stocks are poised to have the brightest decade.
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Investors can have their cake and eat it too. Stay tuned for the next big thing. But until then, it's wise to gravitate towards proven winners. Here are five top AI stocks to buy and hold from now to 2035 and beyond.
Image source: Nvidia
1. Nvidia
It is wise to start Nvidia (NASDAQ:NVDA). It dominates the market for accelerator chips that operate as clusters to train AI models in data centers. You can think of Nvidia as a company that supplies the raw computing power for AI, like the horsepower in a car engine. Nvidia's GPU market share in data centers is as high as 92%, according to analyst research, but the company could soon face more competition.
Nvidia's CUDA programming has established a competitive moat. Virtually all AI hyperscalers have already invested heavily in building their infrastructure using Nvidia's GPUs. So far, hyperscalers have largely avoided experiencing the pain of turning off Nvidia in this fast-paced AI arms race. Nvidia's $500 billion backlog speaks to the company's continued momentum. Overall, the Nvidia investment continues to look like a main player in AI.
2. Alphabet
Google's parent company alphabet (NASDAQ:Google)(NASDAQ:GOOG)AI has tremendous benefits. The company's various consumer products and services reach billions of Internet users around the world. Its ecosystem includes Google apps, YouTube, and Android smartphone software. It also operates Google Cloud and a leading self-driving ride-hailing service. Finally, Alphabet owns about 7% of SpaceX, so investing in Starlink, the company's satellite internet business, would be a smart move.
If that's not enough, Alphabet has emerged as a potential competitor to Nvidia in the AI chip space. The company successfully designed a custom chip called a Tensor Processing Unit (TPU) on which it trained its own AI model, Gemini. The company has since considered selling to another AI company. It's hard to find a more complete AI and technology giant on the market, and investing in Alphabet over the next decade won't be easy.
3.Microsoft
Most investors are already familiar with microsoft (NASDAQ: MSFT). The long-time technology giant will continue to be a major player in AI for two main reasons. First, we operate Azure, the world's second largest cloud services business. It also owns about 27% of OpenAI, the creator of ChatGPT, a leading AI app. So if you want to invest in OpenAI that is currently not publicly available, this is the way to go.
Microsoft's Azure business is poised to grow as demand for AI increases through the cloud. Investors can also enjoy some peace of mind thanks to Microsoft. The company has a mature software business focused on Windows operating systems and Microsoft 365 software. Investors will also benefit from Microsoft's 23rd consecutive year of increased dividends. If you value stability, Microsoft may be the stock for you.
4. Amazon
If it wasn't obvious before, these tech giants are also offering a way to invest in some of the emerging AI companies that aren't yet public. Amazon (NASDAQ:AMZN) is the last example on this list. The e-commerce giant also operates Amazon Web Services (AWS), the world's leading cloud services business. Amazon works closely with OpenAI competitor Anthropic.
Amazon has an $8 billion stake in the company. So owning Amazon stock is an easy way to invest in Anthropic. Amazon's existing cloud, e-commerce, and digital advertising businesses are likely to drive long-term growth, as these trends still have significant life left in them. Amazon likely doesn't need AI to be a successful investment over the next 10 years. That's just the icing on the cake, and human partnership and stakes add a nice cherry on top.
5. Palantir Technologies
AI software is still in its infancy; Palantir Technologies (NASDAQ:PLTR) It's already noticeable. The company specializes in developing custom software applications on its proprietary platform and has continued to accelerate growth since launching its AI-focused platform, AIP, in mid-2023. Palantir is winning both government and corporate business in droves.
The main concern with the stock is its overvalued valuation, which could limit future stock appreciation. Fortunately, Palantir still has less than 1,000 customers, so it has a huge road to customer acquisition over the next decade, which could fuel Palantir's impressive growth for some time to come. Investors should consider taking a bite out of the stock and setting aside some cash in case the stock price plummets. If so, long-term investors should welcome the buying opportunity with open arms.
Should you buy Nvidia stock now?
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Justin Pope has held positions at Alphabet and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
