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Artificial intelligence (AI) isn’t just a trend that will disappear in the next few years. AI is fundamentally how we do business, and the impacts will be felt for decades to come. With that in mind, there are a few AI companies that investors can feel confident buying and holding over the next decade, as they have sustainable trends that will continue pushing their stocks higher.
The three stocks to buy and hold for the next decade that are expected to capitalize on AI are Amazon (AMZN 0.44%), Alphabet (GOOG 0.97%) (GOOGL 0.92%), and Taiwan Semiconductor (TSM 0.89%). This trio makes for an excellent group to buy now with the intention of not selling unless something fundamental changes.
Cloud computing is one of the main beneficiaries of the little-talked-about AI arms race. Not every company has the resources to spend billions of dollars on an AI supercomputer, but they still want access to the computing power those servers can provide. To access this power, corporations contract it to cloud computing giants such as Amazon Web Services (AWS) and Google Cloud.
By renting it, consumers can easily increase or decrease the amount of computing power needed and purchase the data they use to run those AI models. With Amazon and Alphabet offering access to cutting-edge GPUs and traditional AI accelerators, they will offer a significant price proposition to their visitor base.
Additionally, many companies still host Internet sites and purchase data on the site. As the need arises to upgrade replaced hardware, those workloads will most likely continue to migrate to the cloud.
All of this adds up to a hugely developing industry, governed by Amazon and Alphabet. According to Fortune Business Insights, the cloud computing market is expected to grow from $676 billion in 2024 to $2. 3 trillion through 2032. This is huge growth and investors want to be aware of it and invest in it. consciously.
AWS and Google Cloud are currently the largest and third-largest operations in the cloud computing market, respectively. With this dominance level, they are positioned to capitalize on future growth. During the third quarter, AWS’ sales rose 19% year over year to $27.5 billion, and its operating income rose 50% year over year to $10.4 billion — a 38% operating margin. Google Cloud also had a solid quarter, with revenue rising 35% year over year to $11.4 billion, posting an operating margin of 17%.
While these two divisions are just part of a larger entity, they make for compelling reasons to buy the stocks. Cloud computing is a massive trend that isn’t going away, and investing in these two now is a great way to capitalize on that trend.
An investment in Taiwan Semiconductor is a clear bet that we’ll use a great deal of technology and more advanced technology over the next decade. That seems like a no-brainer, which is why Taiwan Semiconductor is on this list.
Taiwan Semi is a chip foundry, which means it makes chips for consumers who can’t do it themselves. This includes GPUs and processors used in Amazon and Alphabet’s cloud-computing smartphone and knowledge centers. If you own a high-tech device, it’s likely full of chips from Taiwan semiconductor factories.
Additionally, TSMC has been at the forefront of launching new technologies. Although it has been producing 3nm (nanometer) chips lately, it is expected to launch 2nm chips by the end of the year and increase production next year. Beyond that, it is already preparing its A16 chip, which will be launched so far in 2026.
All of these advancements will help keep TSMC on top and further advance AI technology.
Over the next decade, we’ll want more chips to power all AI devices, and buying shares in Taiwan Semiconductor is now a safe bet to capitalize on the expansion of AI.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet, Amazon, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Market insight driven through Xignite and Polygon. io.