AI Titans: Alphabet, Amazon, and TSMC Poised for Long-Term AI Dominance

3 Artificial Intelligence Stocks (AI) You Can Buy and Hold for the Next Decade | The Motley Fool

Artificial intelligence (AI) isn't just a trend that will disappear in the next few years. AI is fundamentally how we do business, and the impacts will be felt for decades to come. With that in mind, there are a few AI companies that investors can feel confident buying and holding over the next decade, as they have sustainable trends that will continue pushing their stocks higher. The three stocks to buy and hold for the next decade that are expected to capitalize on AI are Amazon (AMZN -1.20%), Alphabet (GOOG -1.30%) (GOOGL -1.35%), and Taiwan Semiconductor (TSM 3.86%). This trio makes for an excellent group to buy now with the intention of not selling unless something fundamental changes. Cloud computing is one of the biggest beneficiaries of the AI arms race that isn't discussed enough. Not every company has the resources available to spend billions of dollars on a supercomputer for AI, but they still need access to the computing power that these servers can provide. To gain access to that power, companies rent it from cloud computing giants like Amazon Web Services (AWS) and Google Cloud. By renting it, clients can easily scale up or down the amount of computing power needed and store the data on which they're training these AI models. With both Amazon and Alphabet giving clients access to cutting-edge GPUs and custom AI accelerators, they offer a significant value proposition to their customer base. Furthermore, many companies still host many websites and store data on-site. As the need to replace outdated hardware arises, these workloads will likely continue to migrate to the cloud. All of this adds up to a massive growth industry, which Amazon and Alphabet dominate. According to Fortune Business Insights, the cloud computing market is expected to expand from $676 billion in 2024 to $2.3 trillion by 2032. That's huge growth, and investors need to be aware of and consciously invested in it. AWS and Google Cloud are currently the largest and third-largest operations in the cloud computing market, respectively. With this dominance level, they are positioned to capitalize on future growth. During the third quarter, AWS' sales rose 19% year over year to $27.5 billion, and its operating income rose 50% year over year to $10.4 billion -- a 38% operating margin. Google Cloud also had a solid quarter, with revenue rising 35% year over year to $11.4 billion, posting an operating margin of 17%. While these two divisions are just part of a larger entity, they make for compelling reasons to buy the stocks. Cloud computing is a massive trend that isn't going away, and investing in these two now is a great way to capitalize on that trend. An investment in Taiwan Semiconductor is a clear bet that we'll use a great deal of technology and more advanced technology over the next decade. That seems like a no-brainer, which is why Taiwan Semiconductor is on this list. Taiwan Semi is a chip foundry, which means it fabricates chips for clients who cannot do it themselves. This includes GPUs and CPUs that go into Amazon and Alphabet's cloud computing data centers and smartphones. If you have a high-tech device, chances are it's filled with chips that originated from Taiwan Semiconductor's factories. Additionally, TSMC has always been at the forefront of launching new technologies. While it's currently producing 3nm (nanometer) chips, it's slated to launch 2nm chips by the end of the year and ramp up production next year. Beyond that, it's already preparing its A16 chip, which will be launched in the second half of 2026. All of these advancements will help keep TSMC on top and further advance AI technology. Over the next decade, we will need more chips to power all of the AI devices, and buying shares of Taiwan Semiconductor now is a surefire way to capitalize on AI growth.

2 Artificial Intelligence (AI) Stocks With Seemingly Impenetrable Moats That Can Have Their Palantir Moment in 2025 | The Motley Fool

Artificial intelligence (AI) is already transforming many industries, but not all tech companies will benefit equally. The companies with the most potential notched their AI lead years ago before their rivals had even jumped on the AI trend. The competitive moats established by Alphabet (GOOG -0.72%) (GOOGL -0.72%) and Taiwan Semiconductor Manufacturing (TSM 5.20%) could be significant as AI grows, resulting in impressive gains similar to how AI darling Palantir Technologies has benefited recently. There are no guarantees that these two companies will see their share prices rise by more than 800% like Palantir's have over the past two years, but their competitive positions are certainly setting them up for success. Here's how. Alphabet has invested in AI for many years, but as the AI tech wars have heated up, it's now accelerating its AI offerings. A series of videos on Google's blog show an upcoming version of Gemini 2.0, the company's AI agent, in what the company says will help bring about the "agentic era." One particularly interesting clip shows Gemini 2.0 shopping online for a user, adding relevant items to their shopping cart with just a brief description of what they want. Another video shows the AI agent embedded into smart glasses, helping someone remember their passcode for getting into their building and giving them real-time descriptions of what they see around London. The company says the AI agents will be able to remember, complete tasks with multiple instructions, and make decisions on their own. We're still in the beginning stages of this market, but Nvidia CEO Jensen Huang recently said that AI agents could be a "multitrillion-dollar opportunity" in the coming years. And that's not the only AI advantage Alphabet has. The company also owns the autonomous ride-hailing company, Waymo. Developing self-driving vehicles is expensive and difficult, and Waymo is far ahead of the competition, with the company averaging 100,000 paid trips per week. The global ride-hailing market could be worth an estimated $11 trillion by 2030, creating a massive market that autonomous vehicle services like Waymo can tap into. Waymo also recently finished a funding round that values the company at $45 billion, making it an important asset to Alphabet's AI future. Every major technology company offers some sort of AI service, and more services are being developed all the time. This has led to a surge in AI infrastructure spending, with large tech companies pouring money into data centers to keep up with increasing processor demand. The result could be a doubling of data center spending over the next five years, reaching an estimated $2 trillion. And here's where Taiwan Semiconductor, also called TSMC, comes in. The company holds an estimated 90% of the world's most advanced chips, giving the company a massive advantage as AI spending ramps up. Not only does TSMC hold the lead in AI chip manufacturing, but the company also has more advanced manufacturing processes that set it apart. For example, TSMC's 3-nanometer (3nm) manufacturing technology is the "industry's most advanced semiconductor technology," offering the best power and performance that AI players, including Nvidia, AMD, and Google, have already tapped into. TSMC will take its advantage a step further when the company begins its 2nm process later this year, which will be the most advanced tech in the semiconductor industry in both density and energy efficiency. Taiwan Semiconductor's shares have a forward price-to-earnings (P/E) ratio of 22.7. Alphabet's is 21.8, making both stocks relatively well priced compared to the S&P 500's forward P/E ratio of 23.2. The latest research from PwC estimates AI could become a $15.7 trillion market by 2030. That's too big of a market to ignore, and considering TSMC and Alphabet shares are relatively inexpensive right now, investors would be wise to consider putting some money toward these two tech leaders as AI grows.