2 AI Stocks to Buy and Hold for the Next Decade

According to some analysts, artificial intelligence (AI) infrastructure spending will reach a cumulative total of $31.6 trillion through 2050. To put that in perspective, the entire GDP of the U.S. was $30.77 trillion last year. In other words, the AI industry could grow by leaps and bounds over the long run, and plenty of companies could capitalize on that and make their shareholders richer in the process. With that said, let's consider two AI stocks to buy right now and hold onto for the next decade: Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN).

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1. Nvidia

Nvidia has been one of the biggest winners from the AI boom so far. The company dominates the market for GPUs (graphics processing units), the defining hardware of the first wave of the recent AI revolution. Nvidia benefits from a wide moat from switching costs thanks to its CUDA ecosystem. However, some investors worry that the company's prospects are no longer what they once were.

With increased competition and many companies increasingly relying on custom AI chips, Nvidia could see revenue and earnings growth slow considerably in the next few years. These are reasonable concerns, but in my view, Nvidia's outlook appears bright despite these potential problems.

Here are three reasons why. First, Nvidia isn't just a GPU company anymore. The semiconductor specialist offers a complete AI platform, from hardware like GPUs and CPUs to networking and cloud services.

Nvidia sees a large addressable opportunity in some of those niches. For instance, the company has identified a $200 billion opportunity in the CPU market. Second, Nvidia generates significant cash flow and is using it, in part, to return capital to shareholders. In May, it increased its quarterly dividend per share by 2,400% to $0.25. And recently, the tech leader announced a massive increase in its share repurchase program. Third, Nvidia is trading at reasonable levels relative to its growth potential.

The company is trading at 24.9x forward earnings, versus an average of 20.9x for information technology stocks. Considering how fast the company's revenue and earnings have been growing, that valuation is more than fair. These are all good reasons why it's not too late to invest in the stock.

2. Amazon

Amazon is best known to most consumers as an e-commerce leader, and with good reason. The company has the largest share of the U.S. e-commerce market. However, Amazon's cloud business, Amazon Web Services (AWS), has long been its most important driver of operating profits.

Sales growth within AWS has accelerated in recent quarters, partly due to the impact of the company's AI offerings. In the second quarter, AWS revenue came in at $42.2 billion, up 37% year over year, the segment's fastest growth rate in 18 quarters. Amazon's total revenue increased 20% year over year to $200.6 billion. Note that even though AWS accounted for just 21% of the company's top line, its impact on operating income was much bigger.

Amazon's total operating income was $27.5 billion, up 43% year over year. AWS's operating income came in at $16.6 billion, 60% of the total, up almost 63% from the year-ago period.

Several factors could allow Amazon's cloud business to continue growing at a good pace for the foreseeable future. For instance, the company is doubling down on its custom AI chips, including its Trainium franchise, which, as the company has pointed out, are better on price performance than comparable GPUs. So, these chips could help the company keep operating expenses in check and improve margins. Meanwhile, management has said the company cannot meet all demand for its cloud services in 2026, and it already has demand visibility extending into 2028.

Further, Amazon ended the quarter with a $496 billion backlog, which is growing by triple digits year over year. In other words, there remains a vast addressable market ahead for the company. Over the next decade, it could tap into opportunities in cloud computing, while its other segments should also make solid progress. That's why it's worth it to buy and hold Amazon stock.

Prosper Junior Bakiny has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.