Invest in These 5 AI Shares to Maintain for the Following Ten Years
The next decade is set to witness robust growth for Nvidia, Taiwan Semiconductor Manufacturing Company (TSMC), Amazon, Meta Platforms, and Alphabet, driven by the expanding adoption and proliferation of artificial intelligence (AI).
Nvidia, a leading force in AI hardware, is particularly notable for its dominance in the market for GPUs, powering AI workloads across various sectors such as data centers, gaming, automotive, and government AI projects. With a fiscal quarter revenue of $44 billion, Nvidia reported a staggering 69% growth in AI-driven revenue, fuelled by the surging demand for high-performance AI chips like its Blackwell architecture GPUs. Despite geopolitical challenges, Nvidia maintains an impressive 80-90% share of the AI chip market, making it the primary beneficiary of hyperscalers’ expansion in AI infrastructure.
TSMC, the world's largest contract chip foundry, plays a crucial role as a partner in manufacturing Nvidia’s GPUs and chips for other AI market leaders. TSMC's revenues have soared, reaching $30 billion in a record quarter, thanks to strong spending on AI hardware by major cloud providers and AI companies. TSMC commands over two-thirds of contract semiconductor manufacturing spending, positioning it for continued growth in the booming AI data center and chip market.
Amazon, Meta Platforms, and Alphabet (Google’s parent company) are significant AI hyperscalers, investing heavily in cloud AI platforms and data centers. Amazon AWS, Meta, and Google Cloud are rapidly expanding their AI services and infrastructure. Alphabet’s Google Cloud grew by 32% last quarter, with improving operating margins due to AI workloads, and the company raised its capital expenditure guidance to $85 billion to support AI and cloud growth. Meta is a major consumer of GPUs and AI infrastructure to power its social media and metaverse initiatives, while Amazon is investing billions in AI-ready data center buildouts and infrastructure to support expanding AI services.
Each of these companies stands to benefit significantly from the rise of AI. Nvidia's leadership in AI GPUs, TSMC's dominance in advanced semiconductor fabrication, Amazon's massive AI infrastructure spending in AWS, Meta's increased GPU and AI chip consumption, and Alphabet's growth in Google Cloud AI services all point to strong AI-related growth outlooks for the next decade.
In summary, the proliferation of AI will drive exponential demand for GPUs, AI chips, cloud AI platforms, and data centers, directly benefiting Nvidia and TSMC as technology suppliers, and Amazon, Meta, and Alphabet as primary AI cloud infrastructure and service providers. Additionally, Google Search, a significant revenue source for Alphabet, continues to grow, with revenue rising 12% in the second quarter, partially due to the popularity of its Search Overviews, a hybrid between a traditional search engine and generative AI. Amazon Web Services (AWS), a significant part of Amazon's profits, is the largest cloud computing provider and is seeing strong demand for increased computing capacity for AI workloads. Lastly, Nvidia, a top-performing company over the past decade, has seen its stock rise over 30,000%.
Money will flow into Nvidia, TSMC, Amazon, Meta Platforms, and Alphabet as they capitalize on the burgeoning artificial-intelligence (AI) market. The demand for high-performance AI chips, such as Nvidia's Blackwell architecture GPUs, will stimulate finance for Nvidia's continued growth. Concurrently, contract chip foundries like TSMC, with its dominant share in semiconductor manufacturing spending, will also reap fiscal benefits. Investing in cloud AI platforms and data centers by Amazon, Meta, and Alphabet will generate substantial returns, with AI workloads enhancing operating margins andjustifying increased capital expenditure. Moreover, technological advancements in AI, particularly those involving artificial-intelligence, are likely to yield further financial opportunities for these companies in the upcoming decade.
