These 5 AI Stocks Could Be Smart Buys for Long-Term Investors
Artificial intelligence is already reshaping industries by imparting automation and accelerating workflows. Whether it is multi-national corporations or small to medium enterprises, everyone seems to be investing in AI to be future-ready before anyone else. So, there can be no better move than to invest in leading AI companies.
Top 5 AI Stocks for Long-Term Investors
Here are the five AI stocks that seem well-positioned for long-term growth:
Nvidia
Nvidia (NVDA 1.65%) has undoubtedly become the face of AI transformation as its graphics processing units (GPUs) are the main chips that are used by companies worldwide to train AI models and run inference workloads. Thus, Nvidia is the clear winner in the race for computing power providers.
As the cloud providers and tech enterprises are rushing towards building AI infrastructure, Nvidia’s data center revenue has increased significantly over the past years. At the same time, the company has established itself in the AI world by building a powerful ecosystem around its chips by using networking assets and the CUDA software platform.
The growth rate of Nvidia might not be too fast, but its position at the center of AI infrastructure looks stable in the long term. Also, the company is expanding its product portfolio that will ensure long-term, strong earnings.
Read Also
Advanced Micro Devices
Advanced Micro Devices (AMD 2.47%) is one of the prime competitors of Nvidia in the GPU market. The company holds solid traction in the inference market, which signals the tremendous growth of Advanced Micro Devices beyond AI training.
Other than GPUs, AMD’s EPYC server central processing units (CPUs) are also the preferred choice for businesses when it comes to data centers. The CPU server market is not as large as that of GPUs, but it still has the potential to offer a stable future to the company.
AMD doesn’t need to take a big market share from Nvidia to sustain in the market. As the AI infrastructure market grows, even a small market share in this niche would be sufficient for the firm to get a stable and steadily growing future.
Microsoft
Microsoft (MSFT 0.56%) was among the first megacap tech firms to leverage AI through a strategic partnership with OpenAI. The partnership facilitated AI integration into Microsoft’s complete suite of productivity programs like Teams, Excel, and Word. As the enterprise customers are continuously adopting its AI assistant, the company’s revenue growth has been significantly accelerating.
Moreover, the cloud computing unit of Microsoft, Azure, has also been burgeoning in terms of market share as the companies are relying on its infrastructure to train and deploy their AI models. The consistent cash flow generation from Microsoft allows the firm to keep investing in the AI infrastructure to meet growing demand.
As Microsoft is imparting AI in all of its business units, the company appears to be a clear long-term winner in the AI race.
Alphabet
Alphabet’s (GOOGL 3.10%) (GOOG 2.98%) Google Search Engine has lately benefited from its AI enhancements. The company now offers the AI overviews on the search titles that are embraced by billions of businesses around the world. The practice is now contributing to driving more queries. At the same time, Google Lens and Circle are attracting search queries beyond traditional text search. Last quarter, the visual searches showed a growth rate of 70% with shopping queries reigning the supremacy in the category.
Google Cloud has also been significantly contributing as a growth driver with the Gemini AI model, helping the firm to gain interaction with enterprise customers. Alphabet has even developed its custom AI chips that offer a competitive edge to the firm in terms of performance and cost optimization. Similar to Microsoft, Alphabet is also investing heavily in AI infrastructure to synchronize with growing demand.
The firm is already a leader in autonomous driving with a burgeoning Waymo robotaxi business. Also, Alphabet is well established in quantum computing with its Willow chip. All these competencies make Alphabet a must-have stock in your portfolio.
Meta Platforms
Meta Platforms (META 2.04%) is one of the companies that is entirely dedicated to exploring and implementing across its platforms, like Facebook and Instagram. The company is strongly using AI to improve its recommendation algorithms, which ultimately encourages users to spend more time on its social media platforms.
The company has also unveiled the generative AI tools for marketers and advertisers that allow them to customize marketing campaigns and more efficiently target potential customers. The combination is already leading to high ad prices and more ad inventory.
However, the AI story from Meta doesn’t take a pause here, as it has recently hired a top AI talent for its Superintelligence Labs division. The initiative directly signals the vision of Meta on AI, which makes it a recommended AI stock for investment.
