Artificial intelligence (AI) is a game-changing technology, but it will take many years, maybe decades, to change the world. That means there is still plenty of time to position your portfolio to capitalize on AI and reap the rewards of this new technology and its long-term impact.
We know that AI chips are powering these innovations; the blue chip AI stocks of the future could depend on this need for AI chips and which companies come out on top. Here are a few AI chip stocks you can buy today and confidently hold for decades.
1. The winner of the AI chip battle
AI chips are the building blocks of the technology, so it’s hard to mention any long-term stock list without leading off with Nvidia (NASDAQ: NVDA). The company has between 80% and 90% of the AI chip market today.
Such a head start is a moat in its own right because competitors now have to convince companies that are building AI architecture to switch to their chips.
The long-term opportunity for Nvidia is based on how big the AI chip market could still get. Studies see a surge in data-center demand over the coming years, which could stretch the market to as high as $400 billion over the next several years — multiples larger than where it stands today.
What will that chip market look like in 2030, 2040, or 2050? Nobody knows just how powerful AI can become, but we do know that more-powerful AI requires better chips, and nobody has the market cornered like Nvidia when talking about the cutting edge.
It’s a $2 trillion company, and sustained AI demand could keep cash flow strong enough to fund years of aggressive share repurchases and dividends that fill shareholder’s pockets. It’s hard not to like Nvidia, even if its multibagger days are over.
2. The runner-up chip company with upside
It’s hard to imagine one company completely running away with such a large addressable market. Other companies can find a seat at the table, too.
My pick for one of the other competitors is Advanced Micro Devices (NASDAQ: AMD). AMD has proved its ability to penetrate markets by establishing CPU footholds in personal computers and…
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