4 Monster Stocks to Hold for the Next 5 Years

Over the next five years, investors are going to see a lot more spending on artificial intelligence (AI) than previously thought imaginable. While there are fears about how much AI hyperscalers are already spending, I think that amount will continue to rise.

If it does, several companies are slated to cash in, namely Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), Micron (NASDAQ: MU), and Taiwan Semiconductor Manufacturing (NYSE: TSM). All four businesses have a vested interest in seeing data center spending skyrocket.

If spending continues to rise, like it's projected to do, all four of these companies will deliver monster returns.

Image source. Getty Images.

How high can AI spending go?

The number you'll hear thrown around for AI capital expenditures the most is $650 billion, but that's just for the big four AI hyperscalers. That completely leaves out some other large AI players, as well as many of the private companies, like OpenAI or xAI, that are also spending a ton on AI infrastructure. It also doesn't include spending going on in China or any other part of the world. So it's easy to see this number ticking up closer to $1 trillion this year.

McKinsey & Company projects that cumulative AI spending will be about $7 trillion up to 2030, so there's clearly a long runway. Nvidia's projection is more aggressive, as they believe global data center capital expenditures will rise to $3 trillion to $4 trillion annually by 2030. Either way, that's a huge amount of money being spent on AI infrastructure, and these four are well positioned to capitalize on it.

These four stocks will soar if AI spending rises aggressively over the next five years

The poster child of AI investing since the start has been Nvidia. This makes sense, as it's the world's most popular AI computing unit provider.

Nvidia is seeing monster demand that won't slow down, and despite being the largest company in the world, its revenue rose 73% during the fourth quarter (ended Jan. 25) and is expected to rise to 77% in Q1. Nvidia is still the leader, and everyone, ranging from AI hyperscalers to individual developers, wants to be able to use Nvidia chips. This makes Nvidia one of the best options in this space, and with it trading for a cheap 22 times forward earnings, there are few better stocks to buy now.

Broadcom is competing against Nvidia, but not by offering its own GPU. Instead, it's partnering with AI hyperscalers to design its own custom AI chip. This allows the end user to design the chip around the workload, leading to impressive efficiency, as long as the workload is configured properly.

These chips have their own use cases and are important, but they won't ever fully replace GPUs. Still, they are carving out a niche market. In Q1 of fiscal year 2026 (ended Feb. 1), Broadcom's AI semiconductor division grew at a 106% pace to $8.4 billion. Within that division, the AI chip business grew even faster at a 140% pace.

By the end of 2027, Broadcom expects more than $100 billion in AI chip revenue, so it's clear that Broadcom will become a greater force in the AI computing realm over the next few years.

Taiwan Semiconductor Manufacturing couldn't care less whose computing units end up being the most popular; it just wants to see increased AI spending. Because TSMC is a chip fabricator, it will rise as more computing units are sold. With market projections calling for AI spending to ramp up through 2030, it's in a great spot to capitalize on the massive spending spree.

Micron is in a similar boat. It makes memory chips, and with the supply of memory chips running dry, the prices for its primary product are soaring. This is leading to huge earnings growth for Micron, but it isn't expected to slow down anytime soon.

The total addressable market for high bandwidth memory (HBM), the type used for AI, is expected to rise from $35 billion in 2025 to $100 billion by 2028. So, because we're in a memory chip supply crunch now, it doesn't mean it will be alleviated anytime in the future. This bodes well for Micron's stock, and it should continue to do well over the next five years.

Keithen Drury has positions in Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.