3 Artificial Intelligence (AI) Stocks to Buy at $1,150 and Hold for Decades

By | March 21, 2024

Artificial intelligence (AI) is a big deal these days, especially as the stock market looks ahead. It sees the long-term potential of a new technology like AI to change our world. According to Grand View Research, the global AI market was $200 billion last year and will grow nearly 40% annually through 2030.

Now is the time to place your long-term bet and pick the best AI companies that have the potential to outperform both the competition and the broader stock market in the coming years.

Some stocks with high potential stand out from the crowd. This is why investors should consider buying and holding Snowflake (NYSE: SNOW), Palantir Technologies (NYSE:PLTR)And ASML (NASDAQ: ASML) for the coming decades. And at today’s prices, you can get a share of all three for less than $1,150.

1. Storing and organizing data will be critical for AI

Snowflake will be crucial for AI. Artificial intelligence models require vast amounts of data to train on. Snowflake is a data cloud that stores customers’ data on its cloud-based platform. Customers can easily query data from Snowflake, which indexes and stores it cleanly, making it easy to use. Additionally, Snowflake allows customers to share and obtain data from third parties.

Data is growing exponentially. The more digital our world is, the more data we create. And data doesn’t expire; it simply accumulates as time goes by. That’s why most of the world’s data has only been created recently. That statement will probably be true in 10, 20, 30 years. Snowflake costs are based on the computing and storage capacity customers use. It helps customers fit Snowflake into their budget. It also drives revenue growth in the long term, as increasing amounts of data require more storage space and computing power.

Snowflake is a major player in the sector, with privately held Databricks as its main competitor. Snowflake works on top of the major cloud platforms, making them almost more of a partner than a competitor. The usage-based billing may add some volatility to Snowflake’s short-term growth, but the long-term trend should point upwards.

2. Companies will need help deploying AI applications

Any tech investor who reads earnings reports has probably noticed how much every company seemingly mentions AI as part of the future. But not many companies know how to implement AI in their business. That’s where Palantir Technologies’ opportunities lie. The company builds and deploys custom software for government and commercial customers across its three platforms: Gotham, Foundry and, most recently, its Artificial Intelligence Platform (AIP).

AIP is for deploying AI apps, and CEO Alex Karp noted that customer interest in deploying AI through Palantir is huge. It is also evident from the figures. Palantir’s U.S. commercial customer base grew 55% year-over-year in the fourth quarter and 22% quarter-over-quarter. Note that Palantir still only has 221 US customers, versus a market opportunity of thousands of companies in the US alone.

It’s not a stretch to imagine Palantir’s commercial customer base growing in size over the next decade and beyond. It’s all backed by strong ties with the US government, giving the company a high floor. U.S. government contracts currently contribute about half of Palantir’s total revenue.

3. The machines behind AI’s advanced chips

AI chips are currently the main arms race in the technology industry. Everyone is hunting NvidiaIt looks like the company has conquered the chip market with its advanced AI hardware. But ASML doesn’t care which chips everyone uses. That’s because it makes the machines that make the chips. These machines use extreme ultraviolet lithography (EUV) to create delicate designs on silicon wafers.

Many don’t realize this, but the EUV machines that make the smallest and most advanced chips come from only one company in the world: ASML. Yes, it’s a legitimate monopoly. Only ASML has the knowledge and patents to build these machines. That means there will be demand for ASML’s products one way or another, as long as AI models require increasingly sophisticated chips.

According to Mordor Intelligence, the EUV market is currently worth approximately $10 billion and will grow at an average annual rate of 11% to nearly $18 billion by 2029. Investors can buy ASML with confidence, knowing that the drive for innovation in AI will drive will keep the business community warm to the company’s unique machines for years to come.

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends ASML, Nvidia, Palantir Technologies, and Snowflake. The Motley Fool has a disclosure policy.

3 Artificial Intelligence (AI) Stocks to Buy for $1,150 and Hold for Decades was originally published by The Motley Fool

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