3 Promising AI Stocks to Buy Now and Hold Forever

Introduction

Welcome to Simple Investing Secrets, your trusted source for valuable investment insights, stock recommendations, and strategies to help you achieve financial freedom. In this article, we will delve into three outstanding artificial intelligence (AI) stocks that you can buy today and hold for the long term. What if we told you that these stocks could potentially shape the future of technology and your financial future? These aren’t just any stocks; they're cornerstones of the AI revolution, and missing out on them could mean missing some of the biggest gains in the market.

Artificial intelligence has been a game-changer across multiple industries, including healthcare and finance. Its impact is expected to grow exponentially. Today, we’re exploring three AI stocks not just popular in the tech world but recognized among the safest bets for investors looking to capitalize on the AI revolution without taking on excessive risks. These stocks are Alphabet (GOOGL), Microsoft (MSFT), and Nvidia (NVDA). While these names might not surprise you, their potential for long-term value creation is immense.

Alphabet (GOOGL)

As the parent company of Google, Alphabet has been a key player in the AI space for years. The company leverages its vast resources and data to push the boundaries of what is possible with AI. Its AI capabilities are embedded across various products, from search algorithms to autonomous vehicles. Alphabet’s financial performance has been remarkable; the company quadrupled its annual revenue, increasing from around $ 80 billion in 2015 to an impressive $ 328 billion today.

Alphabet stands out for its ability to innovate and expand into new markets, such as autonomous driving technology and healthcare through AI-driven initiatives. With a strong return on invested capital (ROIC) at 29% and a forward price-to-earnings (P/E) ratio of around 18.53%, Alphabet may be undervalued relative to its future earnings. Analysts expect the company to grow its earnings per share (EPS) by 20% per year over the next five years, showcasing its dominance in the AI sector.

Microsoft (MSFT)

Microsoft has seamlessly integrated AI into its core products and services, making it accessible to businesses of all sizes through its Azure Cloud platform. With revenue growth from less than $ 100 billion in 2015 to $ 245 billion in the most recent trailing 12-month period, Microsoft remains an innovator in the tech landscape.

With a return on invested capital matching that of Alphabet at 29%, Microsoft has established itself as a leader in cloud computing. The Azure platform not only powers AI applications but also provides the infrastructure for other companies to build their AI solutions. Microsoft’s acquisition of LinkedIn and integration of AI features into its Office Suite exemplify its multi-faceted approach to AI growth.

Analysts project Microsoft's EPS will grow by 14.6% per year over the next five years, making it a strong contender in the AI market.

Nvidia (NVDA)

Nvidia is closely tied to the rise of AI, as its graphics processing units (GPUs) serve as the backbone for many AI applications. Over the last year and a half, Nvidia’s revenue has skyrocketed to $ 79.7 billion, with projections for an astonishing EPS growth rate of 46.35% in the next five years.

Nvidia boasts a remarkable ROIC of 93.75%, showcasing the company's efficiency in converting investments into profits. Holding an estimated 80% market share in the AI data center GPU space, Nvidia is well-positioned to maintain its lead. Its software ecosystem, including CUDA and AI frameworks, has become essential for AI development, while Nvidia's ventures into automotive AI and gaming multiply its growth avenues.

The company's stock may appear high with a forward P/E ratio of 31.3; however, with the demand for its products, it can still be seen as a strong long-term investment.

Conclusion

In summary, Alphabet, Microsoft, and Nvidia are three promising AI stocks to buy now and hold forever. Each of these companies has a unique position in the AI space, demonstrating strong financial performance and an optimistic future. Whether you're looking for steady growth with Alphabet and Microsoft or explosive potential with Nvidia, these stocks present a great way to invest in the future of AI.

Keyword

• AI stocks
• Alphabet (GOOGL)
• Microsoft (MSFT)
• Nvidia (NVDA)
• financial performance
• revenue growth
• return on invested capital
• earnings per share
• cloud computing
• autonomous vehicles

FAQ

1. What makes Alphabet a strong investment in AI?
Alphabet has shown remarkable revenue growth over the past decade, thanks to its innovative AI applications across various sectors, including autonomous driving and healthcare.

2. How does Microsoft integrate AI into its products?
Microsoft makes AI accessible through its Azure Cloud platform, where businesses can use AI services for intelligent applications. Additionally, AI features are incorporated into its Office Suite.

3. Why is Nvidia considered a leader in AI hardware?
Nvidia holds an 80% market share in the AI data center GPU space, and its GPUs are essential for many AI applications. The company's exceptional growth and efficiency in profits make it a strong investment.

4. What is the expected growth rate for these AI stocks?
Analysts project Alphabet's EPS to grow by 20% per year, Microsoft's by 14.6%, and Nvidia's by an impressive 46.35% over the next five years.

5. Why is it recommended to hold these stocks for the long term?
Each of these companies has established itself as a leader in the AI industry, showcasing strong financial performance and a bright future, making them solid long-term investment choices.