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

It might seem hard to believe, but artificial intelligence (AI) has only been a major story for a few years now. ChatGPT didn't even hit its stride until around late 2022 to early 2023. But just as with the internet and other technological breakthroughs, widespread adoption can take years.

AI is probably going to remain a top investment trend for the foreseeable future. Therefore, it's crucial to consider which companies are most likely to benefit from more people and companies using it. Palantir Technologies (NASDAQ: PLTR) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) stand out as two clear winners here.

Both companies sit squarely at the application layer, the key to bringing society and AI together. Here's how and why these two tech stocks are ones investors will want to buy and hold for the next 10 years.

Image source: The Motley Fool.

Palantir was ahead of the game from the jump, and is reaping the rewards

Frontier AI companies, such as OpenAI and Anthropic, have garnered much of the AI hype over the past few years. However, it's becoming apparent that AI is about far more than the models themselves. In a recent CNBC interview, Palantir CEO Alex Karp discussed how enterprises are increasingly concerned about the data and security risks of dealing directly with frontier AI companies.

In a nutshell, Palantir develops custom applications for government and commercial clients to safely and securely deploy AI. These apps serve as a layer between the AI models and a customer's proprietary data. So, enterprises can use AI without risking trade secrets, while the government can use it without outside interference or breaking confidentiality.

Palantir has been ahead of the game since launching its AIP platform in 2023, and investors need only glance at the numbers to see how popular its software has become. Revenue growth has steadily accelerated since AIP launched, and Palantir is growing without sacrificing profitability.

PLTR Revenue (TTM) data by YCharts

Palantir only has 832 customers. This means there are still hundreds of thousands of large companies it can sell to as AI becomes increasingly prevalent. Palantir's stock has finally pulled back from its all-time high after trading at very steep valuations over the past couple of years, so now looks like a solid buying opportunity for long-term investors.

Alphabet's AI ecosystem is arguably unrivaled

In addition to the famous search engine, Google's parent company is a sprawling tech empire. If you needed a reminder, Alphabet owns YouTube, Chrome, Android, and more. It also has investment stakes in Anthropic and Space Exploration Technologies (SpaceX), and its autonomous ride-hailing subsidiary, Waymo, is one of the earliest physical AI market opportunities to emerge.

From an AI standpoint, Alphabet is a total package. It has its own frontier AI models, a cloud computing business, custom AI data center chips, and troves of first-party data for training its AI. Just about everyone worldwide who uses a smartphone or computer likely uses at least one of Alphabet's apps or services. That's also an enormous distribution network for selling AI to consumers.

Alphabet's various products and business segments intertwine, compounding Alphabet's competitive advantages, which only grow more powerful in the AI era. Alphabet can use AI in many ways across the company, generating a higher return on the capital it's investing in AI and data centers. That's why Alphabet is among the highest spenders on AI and continues to lean further into it.

Investors have started to see the impact AI is having on Alphabet's broader business. Revenue growth has meaningfully accelerated since early last year. Its current growth rate is mindblowing when you consider the sheer size of these numbers. Plus, Alphabet continues to generate positive free cash flow, although it has begun tapping its balance sheet to raise capital.

GOOGL Revenue (TTM) data by YCharts

Given Alphabet's strong, accelerating revenue growth, the company seems highly likely to grow earnings at a double-digit annualized pace over the next 10 years. Meanwhile, the stock currently trades at 25 times its 2026 earnings estimates. It's a reasonable valuation that should leave plenty of room for investment returns, making Alphabet a well-rounded tech and AI powerhouse worth buying and holding.

Justin Pope has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Palantir Technologies. The Motley Fool has a disclosure policy.