Buying and holding stocks of growing companies is an easy path to building wealth in the stock market. Here are two elite leaders in the tech sector who can help you grow your portfolio over the next 10 years.
1. Nvidia
Nvidia (NASDAQ: NVDA) The market cap has tripled over the past 12 months as cloud service providers buy up the company’s most advanced chips to train and power artificial intelligence (AI) models.
Nvidia was founded in 1993 and created its first graphics processing unit (GPU) in 1999. In the early 2000s, Nvidia’s GPUs became the hardware of choice for people who wanted to play video games on PCs. In the last decade, however, the company has found a new group of buyers for its chips: the data center market, which is now its largest industry.
The data center segment now generates 86% of Nvidia’s revenue, but it still has a long way to go to grow. There’s an estimated $1 trillion worth of data center infrastructure in the process of transitioning from central processing units (CPUs) to GPUs for AI, which could push Nvidia’s stock to new heights.
In the coming years, Nvidia is likely to continue to see strong demand for its hardware to train large language models for generative AI applications. According to McKinsey, about two-thirds of organizations are using generative AI, up from one-third a year ago. This is leading to increased investment in AI infrastructure, as reflected in Nvidia’s 427% year-over-year increase in data center revenue in the most recent quarter.
As more companies prepare to launch generative AI apps, the data center infrastructure needed to support them will continue to grow. This will be a huge advantage for Nvidia, which controls an estimated 70% or more of the AI ​​chip market.
Nvidia has dominated the GPU market for years, but its AI opportunities are still in their infancy and could still yield excellent returns for patient investors.
2.Microsoft-
Tech giant Microsoft (NASDAQ: MSFT) has the wind in its sails now, too. It has successfully leveraged its investment in generative AI developer OpenAI to launch new features in its products to drive demand. AI-powered features in Windows, Office and Bing Search are opening up new revenue opportunities for the software leader, and it’s only just getting started.
The stock has reached new heights this year as Microsoft continues to report solid financial results. Revenue grew 17% year-over-year in the most recently reported fiscal quarter, driven by balanced growth in productivity software, cloud services, Windows, search, advertising and gaming.
Microsoft has been investing heavily in its AI infrastructure technology, and it’s paying off. Two-thirds of the Fortune 500 use Microsoft’s Azure OpenAI cloud services. The Intelligent Cloud business was the fastest-growing segment in the quarter, with revenue up 21% year-over-year.
Microsoft Copilot is also proving to be a game changer for working professionals. The AI-powered assistant — available on Windows, Office and other products — is a huge opportunity for Microsoft to continue growing its software business. In fact, 88% of software developers who have used GitHub Copilot say they’re more productive after using it.
The best thing about Microsoft is that it can deliver these innovative software tools while still generating growing profits to drive shareholder returns. Earnings per share grew 20% year-over-year in the third quarter of fiscal 2024, which ended March 31, and Wall Street consensus estimates are for double-digit annual earnings growth over the long term.
If a company like Microsoft, which already has a dominant position, can still deliver market-beating returns, then Microsoft stock should be a logical choice for growth investors.
Should You Invest $1,000 in Nvidia Now?
Before you buy Nvidia stock, here are some things to consider:
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John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends 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 Elite Growth Stocks to Buy and Hold for the Next Decade was originally published by The Motley Fool
