Top AI Stocks to Buy and Hold for the Next Decade
The artificial intelligence (AI) sector is rapidly evolving, presenting lucrative opportunities for investors. Two leading stocks poised for long-term gains over the next decade are Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC). Both companies are strategically positioned to capitalize on the ongoing AI transformation.
1. Nvidia: A Leader in AI Infrastructure
Nvidia has emerged as a dominant player in the AI market. The company’s graphics processing units (GPUs) account for approximately 90% of the AI infrastructure. Nvidia’s advanced technology has made its GPUs essential for AI applications.
Recent acquisitions, such as SchedMD and Groq, highlight Nvidia’s commitment to strengthening its software offerings. SchedMD develops Slurm, an open-source platform used for managing AI chips. By controlling this platform, Nvidia enhances the efficiency of its chips while keeping it accessible for broader use.
Key Facts about Nvidia
- Current Price: $188.63
- Market Cap: $4.6 trillion
- Gross Margin: 70.05%
- Dividend Yield: 0.02%
- 52-Week Range: $86.62 – $212.19
- Volume: 6.1 million
Nvidia’s integration of Groq’s language processing units (LPUs) enhances its competitive edge in AI inference. The company’s CUDA software platform has become a cornerstone for AI application development, supporting extensive libraries tailored for optimized performance.
2. Taiwan Semiconductor Manufacturing Company (TSMC)
TSMC stands as the largest semiconductor manufacturer globally, playing a crucial role in producing advanced chips, including GPUs. The difficulty in manufacturing these sophisticated components provides TSMC with a competitive advantage. Rivals such as Intel and Samsung have faced challenges in achieving high yields in chip production.
TSMC’s business model is thriving, as demand for AI chips is projected to grow at a compound annual growth rate of over 40% in the coming years. The company has also announced plans to increase service prices, reflecting its vital position in the semiconductor market.
Key Facts about TSMC
- Current Price: $319.93
- Market Cap: $1.7 trillion
- Gross Margin: 57.75%
- Dividend Yield: 0.96%
- 52-Week Range: $134.25 – $321.59
- Volume: 959,000
By collaborating with chip designers like Nvidia, TSMC supports the scaling of advanced chip production. This partnership is essential, as Nvidia and other designers rely on TSMC’s expertise to develop next-generation technology.
Conclusion
Nvidia and TSMC are two top AI stocks to buy and hold for the next decade. As the demand for AI technologies continues to rise, both companies are set to benefit significantly from the ongoing advancements in AI infrastructure. Investors looking for long-term gains in this dynamic sector would do well to consider these stocks.
