3 Magnificent Artificial Intelligence (AI) Stocks to Buy and Hold for the Next Decade

3 Magnificent Artificial Intelligence (AI) Stocks to Buy and Hold for the Next Decade

Finding artificial intelligence (AI) stocks that are strong choices to buy and hold for the next decade can be a bit tricky. There are many questions regarding how long some of these companies will be able to maintain their revenue streams, especially once the data center build-out is complete. However, one segment of this sector could have long-term, persistent revenue streams: cloud computing.

Cloud computing capacity is sold on a usage-based model, and as AI usage ramps up, so will the revenues for companies that provide it. Because AI systems create ongoing workloads from training and real-world use, they create lasting demand for processing power. As a result, cloud computing operators look like excellent investments.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

My top three stock picks in this realm may seem obvious, as they are the world's largest cloud computing providers: Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). I'm bullish on all three, as cloud computing could soon be the most dominant part of their businesses.

Although most people think of Amazon first as an e-commerce company, I see it as a cloud computing company. While the revenues from its e-commerce business unit far exceed those of Amazon Web Services (AWS), the reverse is true when it comes to profits. In Q1, AWS accounted for 59% of Amazon's operating profits.

Fortunately, there's a lot more growth in store. AWS just delivered its best quarter in nearly four years, with revenue rising 28% year over year. But that's only the start.

Amazon intends to invest $200 billion in constructing data centers this year, and its CEO noted in his letter to shareholders that the faster AWS is growing, the more capital the company has to invest in the business to support that growth. Management sees this as a major long-term win in terms of expanding the company's cash flow.

With a strong long-term outlook, I think Amazon is a solid stock to buy and hold over the next decade.

While AWS is the world's largest cloud computing provider, Microsoft Azure is the second-largest. Azure has consistently delivered solid growth for several years, and the latest quarter was no exception. Its revenue rose an impressive 40% year over year, making it the fastest-growing Microsoft business unit.