3 Tech Stocks You Can Buy and Hold for the Next Decade

The artificial intelligence (AI) boom of early 2023 has fueled a remarkable two-year rally (so far) for stocks in the technology sector. There are always market downturns along the way, but AI represents a true game-changer that society has not seen since the advent of the Internet.

Research conducted by consulting firm McKinsey estimates the annual economic impact of artificial intelligence It could exceed $23 trillion by 2040. Today’s global GDP is nearly $100 trillion, which implies that AI can drive massive growth for the global economy over time. It’s not too early to think a decade (or more) ahead by investing your money in the technology companies most likely to lead the future.

To help in your research, consider taking a closer look at the three big technology stocks and perhaps buying and holding them for a decade or more.

1. Nvidia

This may not come as a shock Nvidia (NVDA 0.39%) Leads this list. It is the de facto leader in AI chips, and arguably the most important AI supplier. AI requires massive computing power to train and run large language models like OpenAI’s ChatGPT. Smarter AI requires more computing power, positioning Nvidia for growth cycles for the foreseeable future. The company’s Hopper architecture is building models today, and Nvidia has begun rolling out its next-generation semiconductor product at Blackwell, which appears poised for massive success.

It may seem impossible to build on the stock’s 820% rise since early 2023, but Nvidia’s dominance in such a massive AI market may be unprecedented. Given Blackwell’s imminent success, analysts estimate that Nvidia will grow its earnings at a rate of 38% annually over the long term. The stock is trading at a forward P/E ratio of 45 today, an attractive valuation for a company with such expected earnings growth. Nvidia’s continued outperformance and market leadership seemingly justifies buying the stock for its expected large future returns.

2. Amazon

The word “cloud” sounds high in the sky, but it is the ground layer of modern technology, including artificial intelligence, that companies will deploy through cloud computing platforms. Therefore, Amazon (Amzn 1.77%) It will be a no-brainer for the next decade as the world’s leading cloud platform. Investors get much more than just Amazon’s cloud computing business, including dominance in US e-commerce, a thriving advertising business, and a strong Prime membership subscriber base of more than 200 million. Search by Goldman Sachs It is estimated that global cloud revenues could reach $2 trillion by the end of the decade (partly due to artificial intelligence).

Amazon, which has about 31% of the market, generated $103 billion from its cloud segment over the past year. In other words, Amazon’s cloud platform can do it Doubles in size During the next decade. If so, it would greatly benefit shareholders because it is the most profitable part of the company. Analysts estimate that Amazon’s profits will double by 22% annually over the long term. Meanwhile, the stock is trading at a forward P/E of 44. That’s not a bargain, but it’s very reasonable given the future growth. Amazon stock should boom over the coming years, so feel free to continue accumulating stock today.

3. Palantir Technologies

Nvidia and Amazon represent the AI ​​infrastructure, which is the high-level technology and hardware needed to make AI possible. Now, it’s time to focus on applying AI to the real world, where… Palantir Technologies (belter 2.09%) It began to establish itself as a market leader. The company’s software platforms can build and deploy artificial intelligence and data analytics for various applications, ranging from military and defense to supply chain management. The company built its reputation through government work more than a decade ago, but has arguably become the most popular software vendor in the commercial sector since launching its AIP platform for AI applications in April 2023.

Palantir’s US commercial customer base has grown from 181 to 321 over the past year, and there are still about 20,000 large enterprises in the US alone. It’s no exaggeration that Palantir has an almost endless growth runway because its product is so diverse — it can be used almost anywhere there’s data. Revenue growth is accelerating, and analysts estimate that the company will grow its earnings at an impressive annual rate of 27% over the long term.

Palantir’s valuation is the only blemish at the moment. The stock trades at a whopping 212 times earnings, which is very expensive, even when you invest for a decade. Consider biting into stocks at first, waiting for the eventual pullback to acquire more reasonably priced stocks.