The field of artificial intelligence (AI) is hot right now, but that doesn’t mean it’s a short-term investment opportunity. You can make an even bigger win by choosing quality AI players and holding onto them for the long term as they participate in a potential AI revolution.
This technology can change many industries. However, these changes won’t happen overnight, which means AI players can take advantage every step of the way.
Two companies, in particular, buy long-term AI because they are powering AI projects. Without the products and services of these companies, many programs may not be as effective or successful as they are today. These players provide the chips, servers and other back-end elements critical to AI — and their earnings have grown in recent years.
Let’s take a closer look at these two AI powerhouses to buy and hold for the next decade.
Nvidia
NvidiaOf (NASDAQ: NVDA ) Graphics processing units (GPUs) play an important role in the realm of AI. They power the training and inference processes that are absolutely critical if you want an AI model to do its job on its way to solving complex problems. Nvidia’s GPUs are the fastest around, but the company isn’t resting on its laurels. Instead, it is investing in research and development to stay ahead.
Efforts are working. Nvidia aims to launch its new H200 chip in the second quarter of this year and is developing a new chip architecture called Blackwell with the B100 chip for a possible launch later this year. Today, Nvidia has 80% of the AI chip market, and that dominance is likely to continue due to the company’s brand strength and continued innovation.
Even better, Nvidia doesn’t just sell chips — the company offers a wide range of AI products and services that are available through the world’s largest cloud companies such as Amazonof Amazon Web Services (AWS) and Microsoft Azure Nvidia has built a complete platform and expertise in AI, making it the go-to provider for companies developing projects in this market.
That expertise has helped Nvidia report record earnings in recent days, with sales and net income growing in the triple digits. And even though Nvidia shares have taken off, they still trade at just 36 times forward earnings estimates, which is a reasonable valuation considering the company’s strength in this high-growth market.
Super Microcomputer
Super Microcomputer (NASDAQ: SMCI ) Behind the scenes is another AI superstar. The company has been around for nearly 30 years, but only recently has it seen earnings and share performance decline — thanks to its AI business. Super Micro provides servers, workstations, full rack-scale solutions and more to customers in the AI space.
A few things help Supermicro stand out. The company uses a building block architecture, meaning it uses common elements across platforms so it can quickly assemble products for clients. It also allows it to incorporate the latest technology into its products. Speaking of which, SuperMicro works closely with the world’s top chipmakers, including Nvidia, to stay abreast of upcoming chip launches and quickly deliver the latest innovations in their offerings. .
Super Micro also offers a wide selection of configurations for customers to tailor their orders to their needs.
All this has helped Super Micro to win big in the AI market. Most recently, the company reported its first $3 billion quarter — more than a full year’s worth of revenue in 2021.
Chief Executive Officer Charles Liang said the company’s many customer wins are now a result of increased demand. Liang says he expects AI development to continue for several quarters and possibly several years. If he’s right, the earnings and share price performance is just getting started.
Super Micro trades for 54 times forward earnings estimates. That doesn’t sound cheap, but it’s actually a fair price for a company playing a key role in a high-growth industry. Super Micro’s standout strategy can help this player win in the long run.
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John Mackey, former CEO of Whole Foods Market, is a member of the board of directors of The Motley Fool, an Amazon subsidiary. Adria Cimino has positions at Amazon. The Motley Fool has positions and recommends Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a Disclosure Policy.
2 Artificial Intelligence (AI) Stocks You Can Buy and Hold for the Next Decade was originally published by The Motley Fool.