Artificial intelligence (AI) is one of the hottest technology trends right now, and investors broadly are looking to invest in companies that could win big from this tech. That’s natural, as AI has the ability to transform multiple industries and contribute significantly to the global economy over the next decade and beyond.
According to a forecast from Bloomberg Intelligence, the generative AI market could generate a whopping $1.3 trillion in revenue in 2032, accounting for 12% of all tech spending in that year. That would be a massive jump over this year’s estimate of $137 billion in generative AI spending. With that outlook in mind, now would be a good time for investors to buy and hold shares of solid companies that are positioned to capitalize on the looming growth of this lucrative market.
Nvidia (NASDAQ: NVDA) and Palantir Technologies (NYSE: PLTR) are already taking advantage of this huge opportunity. While Nvidia’s graphics processing units (GPUs) are critical hardware for training and powering large language models (LLMs), Palantir is helping customers integrate AI into their operations and use it to improve productivity with its software platform.
Here’s why investors should consider buying these two AI stocks and holding them for the next decade.
1. Nvidia
The demand for chips capable of powering AI applications is set to soar big time in the coming decade. According to Allied Market Research, the AI chip market could generate annual revenue of roughly $384 billion in 2032 as compared to just $15 billion in 2022. Nvidia currently has about a 90% share of the AI chip market, which puts it in a solid position to make the most of this opportunity.
The good part is that Nvidia is already witnessing eye-popping growth. The company will release its fiscal 2024 results next week, and analysts are expecting it to report that its revenue increased 119% to $59 billion. What’s more, Nvidia’s earnings are expected to jump from $3.34 per share in fiscal 2023 to $12.33 in fiscal 2024 thanks to the tremendous pricing power it enjoys in AI chips.
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