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

The AI Boom and Its Impact on Technology Stocks

Many technology stocks have been flying high over the past year, largely driven by the industry’s shift toward artificial intelligence (AI). This boom is sparking massive competition, with various tech companies scrambling to position themselves at the forefront of what promises to be a monumental leap in technology. But the question remains: which tech stocks are equipped to impress over the next 10 years, not just for the next 10 months? To identify these enduring players, it’s essential to focus on companies that lead their respective markets and consistently innovate to maintain that position. Here, we spotlight three companies that fit the bill.

1. Nvidia

Many investors may feel they’ve missed the boat with Nvidia (NASDAQ: NVDA), but it’s time to recalibrate your expectations. Instead of dwelling on past performance, ask yourself which companies are gearing up for dominance in the next decade. Nvidia is firmly in this category, boasting an estimated 70% to 95% share of the AI chip market. Their recent launch of the H200 AI processor, the successor to the highly successful H100 chip, has already generated more demand than supply according to company management.

When considering the scale of future AI demand, Goldman Sachs estimates that companies will invest a staggering $1 trillion in AI initiatives over the next few years. If that figure seems exaggerated, look no further than global investments—countries like Japan are building AI supercomputers utilizing thousands of Nvidia’s H200 chips. While it’s unlikely investors will see the same explosive gains Nvidia has experienced in recent years, the onset of the AI race offers ample opportunity for growth. Currently, Nvidia’s shares have a forward price-to-earnings ratio (P/E) of 41, and with a recent dip of approximately 8% over the last three months, it presents a prime buying opportunity for long-term investors focused on AI.

2. Broadcom

If you’re searching for a less mainstream AI investment, consider Broadcom (NASDAQ: AVGO). The company has found a lucrative niche in the AI market through its application-specific integrated circuits (ASICs), which are in increasing demand. These chips streamline fundamental AI tasks, and major tech players like Meta and Alphabet are leveraging them to pursue their AI objectives. In fact, Broadcom has tripled its AI sales in the last quarter, reaching $3.1 billion, and forecasts around $12 billion in AI revenue by the end of 2024.

In addition, J.P. Morgan projects Broadcom’s total addressable market for AI chips to be around $150 billion within the next four to five years. Recently, Broadcom made a strategic acquisition by purchasing software company VMware, a move that allows it to offer cloud platform services to businesses keen on establishing private or hybrid cloud systems. Given the rising importance of cloud computing to AI initiatives, Broadcom’s shares, trading at a forward P/E of about 27, are reasonably priced compared to many of its AI chip competitors.

3. CrowdStrike

In an era where cybersecurity threats are ever-evolving, there’s one company that remains at the vanguard of security—CrowdStrike Holdings (NASDAQ: CRWD). Cybersecurity will persist as a pressing issue, especially as new criminal tactics challenge existing defenses. CrowdStrike has been integrating AI into its Falcon security platform for years and took a significant step forward last year with the introduction of Charlotte AI, designed to facilitate more effective threat identification and resolution for security analysts. Management reports that companies using Charlotte AI save two hours daily in their security operations.

CrowdStrike’s leadership in AI-driven cybersecurity could lead to fruitful ventures in the coming decade, especially since Morgan Stanley predicts that by 2035, AI cybersecurity will burgeon into a $135 billion market—nine times larger than it was in 2021. Recently, about 65% of CrowdStrike’s customers opted for five or more modules on its Falcon platform, with 45% selecting six or more, underscoring the value they derive from its offerings. Although CrowdStrike’s shares are somewhat pricey, boasting a forward P/E of 82, the recent 20% share price drop presents a compelling entry point for investors aiming to capitalize on its status as a leader in AI cybersecurity.

Conclusion

Navigating the tech market can be daunting, but focusing on companies like Nvidia, Broadcom, and CrowdStrike can yield significant returns over a decade. Each of these firms exemplifies leadership and innovation in their respective niches, with strong growth forecasts fueled by the AI revolution. As you build your portfolio for long-term growth, consider these stocks for a sturdy foundation that could weather market fluctuations while capitalizing on the inevitable march toward an increasingly tech-driven future.