2 Elite Growth Stocks to Buy and Hold for the Next Decade

Buying and holding shares of growing firms is a simple path to constructing wealth within the stock market. Listed below are two elite leaders within the technology sector that may allow you to grow your portfolio over the following 10 years.

1. Nvidia

Nvidia (NASDAQ: NVDA) market cap has tripled during the last 12 months as cloud service providers snap up the corporate’s highest-end chips to coach and power artificial intelligence (AI) models.

Nvidia was founded in 1993 and created its first graphics processing unit (GPU) in 1999. Through the early 2000s, Nvidia’s GPUs became a preferred hardware alternative for individuals who desired to play video games on PCs, but within the last decade, the corporate found a recent set of buyers for these chips — the information center market, which is now its largest business.

The info center segment now generates 86% of Nvidia’s revenue, but it surely’s got an extended runway for growth ahead. There’s an estimated $1 trillion price of information center infrastructure that’s within the means of transitioning from central processing units (CPUs) to GPUs for AI, which could lift Nvidia shares to recent highs.

Over the following few years, Nvidia should proceed to see strong demand for its hardware to coach large language models for generative AI applications. Around two-thirds of organizations are using generative AI, up from one-third a yr ago, in accordance with McKinsey. That is driving more investment in AI infrastructure, as was reflected within the 427% year-over-year increase in Nvidia’s data center revenue last quarter.

With more firms preparing to launch generative AI apps, the information center infrastructure required to support them will proceed to grow. This shall be an enormous profit for Nvidia, which controls an estimated 70% or more of the AI chip market.

Nvidia has dominated the GPU market for a few years, but its opportunity in AI remains to be in its early innings, and will still deliver outstanding returns for patient investors.

2. Microsoft

Tech giant Microsoft (NASDAQ: MSFT) also has the wind in its sails at once. It has successfully leveraged its investment in generative AI developer OpenAI to unleash recent features across its products to drive demand. AI-powered features in Windows, Office, and Bing search are opening recent revenue opportunities for the software leader, and it’s just getting began.

The stock has hit recent highs this yr as Microsoft continues to report solid financial results. Revenue grew 17% yr over yr in its most recently reported fiscal quarter, driven by balanced growth across productivity software, cloud services, Windows, search, promoting, and gaming.

Microsoft has been investing heavily in its AI infrastructure technology, and it’s paying off. Two-thirds of the Fortune 500 are using Microsoft’s Azure OpenAI cloud services. Its Intelligent Cloud business was its fastest-growing segment last quarter, with revenue up 21% yr over yr.

Microsoft Copilot can be proving to be a game changer for working professionals. That AI-powered assistant — available on Windows, Office, and other products — is a large opportunity for Microsoft to proceed growing its software business. For instance, 88% of software developers which have used GitHub Copilot say they’re more productive after using it.

The most effective thing about Microsoft is that it may possibly deliver these modern software tools and still produce growing profits to fuel returns to shareholders. Earnings per share grew by 20% yr over yr in its fiscal 2024 third quarter, which ended March 31, and the consensus estimates on Wall Street are that its earnings will continue to grow at double-digit percentage annual rates over the long run.

When an already-dominant company like Microsoft can still deliver market-beating returns, its stock needs to be a no brainer alternative for growth investors.

Do you have to invest $1,000 in Nvidia at once?

Before you purchase stock in Nvidia, consider this:

The Motley Idiot Stock Advisor analyst team just identified what they consider are the 10 best stocks for investors to purchase now… and Nvidia wasn’t considered one of them. The ten stocks that made the cut could produce monster returns in the approaching years.

Consider when Nvidia made this list on April 15, 2005… if you happen to invested $1,000 on the time of our suggestion, you’d have $751,670!*

Stock Advisor provides investors with an easy-to-follow blueprint for achievement, including guidance on constructing a portfolio, regular updates from analysts, and two recent stock picks every month. The Stock Advisor service has greater than quadrupled the return of S&P 500 since 2002*.

See the ten stocks »

*Stock Advisor returns as of July 2, 2024

John Ballard has positions in Nvidia. The Motley Idiot has positions in and recommends Microsoft and Nvidia. The Motley Idiot recommends the next options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.

2 Elite Growth Stocks to Buy and Hold for the Next Decade was originally published by The Motley Idiot

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