Got $1,000? 2 Artificial Intelligence (AI) Stocks to Buy Right Now and Hold for the Next Decade.

Finding stocks to buy and hold over the next decade is no easy task. If you rewind to mid-2016, could you have predicted all of the various notable events that occurred over the next few years: COVID-19, the rise of generative AI, presidential election results, or wars? I doubt it.

However, a few somewhat predictable items have panned out. One of those is cloud computing, which was just starting to pick up momentum in 2016 and turned out to be a great business over the next decade. I think there are a ton of signs that cloud computing will remain a strong business over the next decade-plus, driven by AI workloads that come online.

Two of my favorite stocks in this industry are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT). Both of these are major cloud computing providers, and I think that each makes for a solid investment right now.

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Alphabet

Alphabet's cloud computing wing is known as Google Cloud. Google Cloud was the last of the major three cloud platforms to start up, but it has quickly risen to become a notable force among the three, the other being Amazon's (NASDAQ: AMZN) Amazon Web Services (AWS).

Google Cloud's revenue growth rate is by far the fastest. In the first quarter, its revenue rose by a jaw-dropping 63% year over year, adding nearly $8 billion in new business over the past 12 months. It also did a tremendous job expanding its operating margin from 18% to 33%.

All of this is occurring because Google Cloud has become a top place to run AI workloads. Alphabet has a strong generative AI offering, Gemini, native to Google Cloud. Gemini is a strong competitor in the AI arena and offers some of the highest-performing yet lowest-cost models in the market. The vast majority of AI applications are likely suited to this lower cost offering, making Google Cloud a top place to build AI applications.

Furthermore, Google Cloud has a secret weapon: The Tensor Processing Unit (TPU). The TPU is a custom-designed AI chip that can offer superior cost-performance compared to GPU-based training and is another reason Google Cloud is so rapidly growing. In fact, the TPU is so effective that Alphabet is going to start selling TPUs to external clients as another revenue stream.

Alphabet is the fastest-growing cloud titan in the space and has a strong AI offering that's assisting it. I think it's a great buy now, as these AI workloads will need to run on Google Cloud's servers forever, leading to a great subscription-like model.

Microsoft

Microsoft doesn't provide investors with as much information regarding Azure as Alphabet does with Google Cloud. Instead, it provides investors only with its growth rate, which was 40% year over year in its latest quarter. That's still an impressive growth rate, and what's driving that is Microsoft's neutral state.

Unlike Alphabet, which would prefer its users to use its Gemini family, Microsoft is staying agnostic. Countless large language models can be accessed on Azure, making it a great place to go if you're not sure which AI model you want driving your application. But Microsoft also owns 27% of OpenAI, the makers of ChatGPT, so it also has a vested interest in having its clients choose ChatGPT.

Microsoft has also integrated ChatGPT across its various business productivity software via Copilot, which is part of an AI business unit with annual revenue of $37 billion, growing at a 123% clip.

Perhaps the most compelling part about Microsoft's stock is its stock price: It's down 30% from its highs. Considering the strength of Microsoft's core business and the longevity of the new cloud workloads coming online, I think this is a bargain, and investors should scoop up Microsoft stock alongside Alphabet's to form a great investment group that should crush the market over the next decade.

Keithen Drury has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.