Do you possess $3,000? Two Artificial Intelligence (AI) Stocks to Purchase and Maintain for the Long Term
In recent decades, the technology sector has generated some of the most significant victories in the stock market, and artificial intelligence (AI) holds significant potential for investors who invest in the appropriate equities.
The following companies are competitively positioned to deliver outstanding returns over the long term, as they have already done over the past decade, if you have $3,000 to invest. By distributing your funds evenly among these companies, you will have a comprehensive understanding of both the hardware and software aspects of the AI market.
1. Nvidia
To train computer models to understand and respond to human inquiries in natural language, the computing capacity of graphics processing units (GPUs) is indispensable. The gold standard is Nvidia’s (NASDAQ: NVDA) GPUs. The recent decline in the stock price presents an excellent opportunity to purchase, as the company is currently experiencing explosive demand.
Nvidia’s data center revenue more than doubled last year and now comprises almost 90% of its business. The company’s new Blackwell computing system is anticipated to generate a 54% revenue increase for the current fiscal year, according to investors.
Blackwell was designed to deliver significant performance enhancements over the prior Hopper iteration of processors for AI operations. AI models from OpenAI, xAI, and others are growing increasingly sophisticated in their ability to solve intricate problems and logically converse with a human on a number of topics. The computational capacity to enhance the next iteration of AI models will be up to 100 times more per task, which should benefit Nvidia.
Some of Nvidia’s customers, including OpenAI, are investing in custom AI processors, which poses a risk. This is one reason why Nvidia stock has fallen year to date, but these concerns are likely exaggerated.
Nvidia isn’t just selling processors to model builders for specific duties. Its GPUs can be used for a wide variety of computing purposes. For example, the Mayo Clinic is building a state-of-the-art digital pathology facility to speed up the diagnosis and treatments in healthcare using Nvidia’s DGX computing platform.
Nvidia offers solutions like this for several industries, which is a competitive advantage. This advantage can be seen by its exceptional profit margin. Last year, Nvidia earned $73 billion in net income on $130 billion of revenue.
The consensus analyst estimate has the company’s earnings growing at an annualized rate of 35% over the years. These prospects make Nvidia stock an attractive value at current share prices, trading at just 26 times this year’s earnings estimate.
2. Microsoft
Companies are increasingly turning to the cloud and AI services to increase productivity, and Microsoft (NASDAQ: MSFT) is one of the top providers they are turning to. It’s a top brand in software, with more than 1 billion devices operating Windows. The company’s latest quarterly update reveals it is gaining momentum.
Microsoft’s revenue grew 15% year over year on a constant-currency basis last quarter, with earnings up 19%. Growth was driven across every segment, most notably in the cloud, with Microsoft Azure posting an impressive 35% year-over-year increase.
AI has become an essential investment by large businesses, as AI services contributed nearly half of Azure’s growth last quarter. This is more than double the revenue contribution of AI just a year ago. Microsoft saw accelerating demand, noting that Abercrombie & Fitch, Coca-Cola, and ServiceNow recently expanded their business with Azure.
Microsoft stock sold off earlier this year, as the company’s earnings growth didn’t meet the expectations implied by its premium valuation. However, the largest data center operators, including Microsoft, are in an excellent position to satisfy expanding demand for AI services over the long term. These large tech companies have enormous resources to invest in technology, which is widening their competitive moats.
Microsoft reported that hundreds of thousands of clients across industries are using its Copilot AI assistant. This is up threefold from this time last year, and management says the scale of new Copilot agreements for enterprises continues to grow.
Microsoft is a no-brainer tech stock to buy and hold. It’s rock-solid financially, with $96 billion generated in net income on $270 billion of revenue over the last year. Analysts expect earnings to grow at an annualized rate of 12%, which should lead to comparable shareholder returns.
In recent decades, the technology sector has generated some of the most significant victories in the stock market, and artificial intelligence (AI) holds significant potential for investors who invest in the appropriate equities.
The following companies are competitively positioned to deliver outstanding returns over the long term, as they have already done over the past decade, if you have $3,000 to invest. By distributing your funds evenly among these companies, you will have a comprehensive understanding of both the hardware and software aspects of the AI market.
Where to invest $1,000 right now? Our analyst team just disclosed what they believe are the 10 finest equities to buy right now. Continue »
A model of a bull on top of a computer processor.
Image source: Getty Images.
1. Nvidia
To train computer models to understand and respond to human inquiries in natural language, the computing capacity of graphics processing units (GPUs) is indispensable. The gold standard is Nvidia’s (NASDAQ: NVDA) GPUs. The recent decline in the stock price presents an excellent opportunity to purchase, as the company is currently experiencing explosive demand.
Nvidia’s data center revenue more than doubled last year and now comprises almost 90% of its business. The company’s new Blackwell computing system is anticipated to generate a 54% revenue increase for the current fiscal year, according to investors.
Blackwell was designed to deliver significant performance enhancements over the prior Hopper iteration of processors for AI operations. AI models from OpenAI, xAI, and others are growing increasingly sophisticated in their ability to solve intricate problems and logically converse with a human on a number of topics. The computational capacity to enhance the next iteration of AI models will be up to 100 times more per task, which should benefit Nvidia.
Some of Nvidia’s customers, including OpenAI, are investing in custom AI processors, which poses a risk. This is one reason these concerns are likely exaggerated.
Nvidia isn’t just selling processors to model builders for specific duties. Its GPUs can be used for a wide variety of computing purposes. For example, the Mayo Clinic is building a state-of-the-art digital pathology facility to speed up the diagnosis and treatments in healthcare using Nvidia’s DGX computing platform.
Nvidia offers solutions like this for several industries, which is a competitive advantage. This advantage can be seen by its exceptional profit margin. Last year, Nvidia earned $73 billion in net income on $130 billion of revenue.
The consensus analyst estimate has the company’s earnings growing at an annualized rate of 35% over the years. These prospects make Nvidia stock an attractive value at current share prices, trading at just 26 times this year’s earnings estimate.
2. Microsoft
Companies are increasingly turning to the cloud and AI services to increase productivity, and Microsoft (NASDAQ: MSFT) is one of the top providers they are turning to. It’s a top brand in software, with more than 1 billion devices operating Windows. The company’s latest quarterly update reveals it is gaining momentum.
Microsoft’s revenue grew 15% year over year on a constant-currency basis last quarter, with earnings up 19%. Growth was driven across every segment, most notably in the cloud, with Microsoft Azure posting an impressive 35% year-over-year increase.
AI has become an essential investment by large businesses, as AI services contributed nearly half of Azure’s growth last quarter. This is more than double the revenue contribution of AI just a year ago. Microsoft saw accelerating demand, noting that Abercrombie & Fitch, Coca-Cola, and ServiceNow recently expanded their business with Azure.
Microsoft stock sold off earlier this year, as the company’s earnings growth didn’t meet the expectations implied by its premium valuation. However, the largest data center operators, including Microsoft, are in an excellent position to satisfy expanding demand for AI services over the long term. These large tech companies have enormous resources to invest in technology, which is widening their competitive moats.
Microsoft reported that hundreds of thousands of clients across industries are using its Copilot AI assistant. This is up threefold from this time last year, and management says the scale of new Copilot agreements for enterprises continues to grow.
Microsoft is a no-brainer tech stock to buy and hold. It’s rock-solid financially, with $96 billion generated in net income on $270 billion of revenue over the last year. Analysts expect earnings to grow at an annualized rate of 12%, which should lead to comparable shareholder returns.
Don’t overlook this second chance at a potentially lucrative opportunity.
Ever felt like you missed the boat in purchasing the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they believe are about to explode. If you’re concerned you’ve already wasted your opportunity to invest, now is the ideal time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $302,503! Apple: If you invested $1,000 when we doubled down in 2008, you’d have $37,640! Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $614,911!*
We’re issuing “Double Down” alerts for three exceptional companies, available when you join Stock Advisor, and there may not be another opportunity like this anytime soon.
