2 Artificial Intelligence (AI) Stocks to Buy and Hold for Big Long-Term Potential

All eyes have been on the artificial intelligence (AI) market over the past year. The launch of OpenAI’s ChatGPT in late 2022 has reignited interest in the technology and forced many to rethink what they currently thought was possible with AI. Advances in generative software could boost countless industries, from self-driving cars to e-commerce to consumer products to cloud computing and more.

The rise of AI has been a crucial growth driver across the world. Nasdaq-100 Technology SectorThat’s an increase of 33% over the last 12 months. Dozens of AI-based technology companies have made solid gains using AI. However, the market appears far from reaching its ceiling, suggesting that it is not too late to invest long-term in the industry.

Chip stocks like Nvidia (NASDAQ:NVDA) And Intel (NASDAQ:INTC) are attractive options, with both companies developing the hardware that makes AI possible. These tech giants could have a lot to offer investors in the coming years as demand for chips increases and the AI ​​market grows.

Here are two AI stocks to buy and hold for great long-term potential.

1.Nvidia

Nvidia shares have soared more than 210% since last June. The company has rallied investors by securing a leading market share in AI Graphics Processing Units (GPUs)the chips used to run and train AI models.

As a result, Nvidia shares are trading at a premium, with a forward price/earnings (P/E) ratio of approximately 44. However, this number does not necessarily tell the whole story.

First, Nvidia’s forward P/E is lower by the same measure for its biggest rival, Advanced microsystemswhich has a forward P/E of 48. The difference indicates that Nvidia’s stock is trading at a better value despite significantly greater stock growth than AMD over the last year.

NVDA PE Ratio Chart (Forward)

Additionally, even with Nvidia’s meteoric rise, the company’s stock value has actually increased since 2021. This chart shows that Nvidia’s forward P/E and price-to-earnings-to-growth (PEG) ratio have plunged , indicating that the company’s shares could be trading at one of their best values ​​in years. Now may be the best time to invest in Nvidia.

However, it will be crucial to approach this stock from a long-term perspective. Nvidia has delivered several quarters of record profits, posting revenue growth of 262% in the first quarter of fiscal 2025 (ending April 2024). Still, Nvidia’s high forward P/E suggests that some of its projected financial growth may already be priced into its stock to some degree. But maintaining it for many years will likely alleviate this phenomenon.

Nvidia has around 70-95% market share in AI chips. The company has become the go-to chip supplier for AI developers around the world, illustrating a dominance that will likely prove difficult for competitors like AMD to overcome.

As a result, Nvidia could have a lot more to offer in the long term, and it remains an AI stock worth investing in now.

2.Intel

Intel’s inclusion on this list may have you wondering why you should consider…

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