Buying and holding stocks in growth companies is a simple way to build wealth in the stock market. Here are two elite tech leaders who can help you grow your portfolio over the next 10 years.
1. Nvidia
Nvidia (NASDAQ: NVDA) market capitalization has tripled in the past 12 months as cloud service providers snap up the company’s highest-end 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 a preferred hardware choice for people who wanted to play video games on PCs, but over the past decade, the company has found a new set of buyers for those chips: the data center market, which is now its largest business.
The data center segment currently generates 86% of Nvidia’s revenue, but it still has plenty of room to grow. An estimated $1 trillion in data center infrastructure is transitioning from central processing units (CPUs) to GPUs for AI, which could send Nvidia’s stock to new highs.
Over the next few years, Nvidia is expected to continue to benefit from strong demand for its hardware designed to train large language models for generative AI applications. According to McKinsey, about two-thirds of companies are using generative AI, up from one-third a year ago. That’s driving increased investment in AI infrastructure, as evidenced by Nvidia’s 427% year-over-year increase in data center revenue in the most recent quarter.
As more companies prepare to launch generative AI applications, the data center infrastructure needed to support them will continue to grow. That will be a huge advantage for Nvidia, which controls about 70% or more of the AI ​​chip market.
Nvidia has dominated the GPU market for many years, but its opportunity in AI is still in its early stages and could still offer exceptional returns to patient investors.
2. Microsoft
Technology giant Microsoft (NASDAQ: MSFT) is also riding high right now. The company has leveraged its investment in generative AI developer OpenAI to launch new features across 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 that’s just the beginning.
The stock has hit new highs this year as Microsoft continues to report strong financial results. Revenue rose 17% year over year in the most recent fiscal quarter, driven by balanced growth in productivity software, cloud services, Windows, search, advertising and gaming.
Microsoft has invested heavily in its AI infrastructure technology, and it’s paying off. Two-thirds of Fortune 500 companies use Microsoft’s Azure OpenAI cloud services. Its intelligent cloud business was its fastest-growing segment in the latest quarter, with revenue up 21% from a year earlier.
Microsoft Copilot is also proving to be a game-changing tool for professionals. This AI-powered assistant, available across Windows, Office, and other products, represents a huge opportunity for Microsoft to continue growing its software business. For example, 88% of software developers who have used GitHub Copilot say they are more productive after using it.
Microsoft’s biggest advantage is that it can deliver these innovative software tools while continuing to generate growing profits to fuel shareholder returns. Earnings per share rose 20% year over year in its fiscal 2024 third quarter, which ended March 31, and Wall Street consensus estimates indicate that its earnings will continue to grow at double-digit annual rates over the long term.
When an already dominant company like Microsoft can still deliver market-beating returns, its stock should be an obvious choice for growth investors.
Should You Invest $1,000 in Nvidia Right Now?
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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 position in Nvidia. disclosure policy.
2 Elite Growth Stocks to Buy and Hold for the Next Decade was originally published by The Motley Fool
