3 AI Stocks to Buy and Hold Through 2030

Data center spending could hit $3.2 trillion in the next three years, according to an August 2026 report by Morgan Stanley. Amazon CEO Andy Jassy said Amazon Web Services -- the leading cloud services provider -- won't have enough capacity to meet demand this year, and he expects the shortage to continue in 2027.

That shortage benefits the companies that supply chips and rent out compute capacity. Broadcom (NASDAQ: AVGO), Iren (NASDAQ: IREN), and Taiwan Semiconductor Manufacturing (NYSE: TSM) all trade at attractive valuations relative to their growth potential and can outperform the market through 2030.

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1. Broadcom: AI revenue to double next year

Broadcom designs custom AI accelerators called XPUs and also sells networking equipment that speeds up data communication between chips in a data center. In its fiscal third quarter, total revenue rose 86% year over year to nearly $30 billion, while AI semiconductor revenue jumped 221% to $16.7 billion.

Anthropic is on track to become Broadcom's largest XPU customer in 2027, and OpenAI's Jalapeño chip and Alphabet's Google's TPU v8i are both already shipping. Company guidance calls for AI revenue to reach $58 billion in fiscal 2026, $115 billion in fiscal 2027, and $230 billion in fiscal 2028.

The risk is that Broadcom's customers may need help financing chip purchases, including Anthropic and OpenAI, through a platform with Apollo and Blackstone. If a customer were to pull back on its orders or be unable to raise the money, AI revenue could miss guidance.

The stock trades at a forward price-to-earnings (P/E) ratio of about 28, as of Oct. 26. Analysts expect $11.66 in earnings per share this fiscal year, rising to about $30 in fiscal 2028, consistent with management's target. That works out to a forward P/E of about 11 -- a low valuation that can set up market-beating gains if Broadcom can meet its guidance.

2. Iren: A full-stack data center builder and operator

Iren is phasing out its Bitcoin mining operations to rent out capacity to hyperscalers and AI companies. Its advantage is that it owns land, power, data centers, graphics processing units (GPUs), and cloud software. It has everything it needs to become a hyperscaler, offering cloud services and cutting-edge compute for AI workloads.

That matters because new data centers take years to bring online, even as AI usage skyrockets. On its August earnings call, management noted that weekly token usage across large language models rose nearly 17 times in eight months.

The risk is the price tag. Iren plans to spend up to $30 billion on its build-out next year, while it reported just $707 million in trailing-12-month revenue and a net loss of over $700 million. However, customer prepayments are funding 45% to 55% of GPU costs, and Iren is expected to end 2026 with $4 billion in annual recurring revenue (ARR) after delivering its first batch of contracted capacity to Microsoft last quarter.

Iren's land and power assets could become increasingly valuable in a compute-constrained world. Wall Street's fiscal 2029 consensus estimate calls for earnings before interest, taxes, depreciation, and amortization (EBITDA) to reach $9.9 billion. Iren's $10 billion market cap looks cheap relative to that estimate.

3. Taiwan Semiconductor: The foundry behind the boom

Taiwan Semiconductor Manufacturing (TSMC) is the leading chipmaker, controlling over 70% of the foundry market, according to Counterpoint. It makes chips for other companies, and CEO C.C. Wei says that it works with all the AI companies. Third-quarter revenue hit $46.7 billion, up 41% year over year.

Demand for advanced 7-nanometer chips and smaller chips accounted for 79% of the company's wafer revenue in Q3 2026. TSMC dominates the foundry market because it can supply enough chips to meet demand across multiple markets, including smartphones. High-performance computing (HPC), including AI data centers, makes up 68% of the company's total revenue.

TSMC forecasts AI accelerator revenue to compound in the mid-to-high-50s percentage range through 2029, and on the latest Q3 2026 earnings call, Wei said it will "probably" be higher. To meet demand, TSMC is investing $60 billion to $64 billion this year, partly to fund expanded manufacturing capacity across nearly 20 facilities worldwide.

Although the chip industry has grown significantly for several decades, it can experience ups and downs like the broader economy. Anything that slows chip demand and the data center build-out would send TSMC stock lower.

Still, the stock's valuation looks attractive. The shares trade at a forward P/E of 24, with analysts expecting earnings to grow at an annualized rate of 43%. That can support market-beating gains through 2030.

John Ballard has positions in Amazon, Bitcoin, and Iren. The Motley Fool has positions in and recommends Alphabet, Amazon, Bitcoin, Blackstone, Broadcom, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.