Invest in these AI Shares for a Long-Term Gain Over the Next Ten Years
The AI sector is on a roll, churning out exponential growth over the past decade. With better chips and smarter algorithms, generative AI platforms like OpenAI's ChatGPT have propelled AI into the mainstream.
The AI surge isn't slowing down anytime soon. Grand View Research predicts a staggering 36.6% compound annual growth rate for the global AI market from 2024 to 2030, as more industries embrace AI technology. Navigating the sea of AI stocks can be a daunting task, however. Let's dive into three robust blue-chip stocks that could soar on the AI market's ongoing growth over the coming decade: Nvidia (NVDA, up 6.41%), Broadcom (AVGO, 3.06%), and Taiwan Semiconductor Manufacturing (TSM, 3.53%).
1. Nvidia
Nvidia, the world's dominant graphics processing unit (GPU) producer, has consistently reigned supreme in the industry. Initially used for gaming and professional visualization, Nvidia's chips are now a crucial component in data centers, processing complex AI and machine learning tasks. Top AI companies, including Microsoft and OpenAI, rely on its chips.
GPU's ability to process a wide range of floating-point numbers simultaneously provides the needed efficiency for the AI gold rush, granting Nvidia a significant edge over its smaller rivals. With its first-mover advantage in this space, the company saw its data center chip sales surge an impressive 142% in fiscal 2025, accounting for 88% of its total revenue. The company's total revenue soared 114%, as its adjusted earnings per share (EPS) skyrocketed 130%. For fiscal 2026, analysts predict another 56% revenue growth and a 50% increase in adjusted EPS, as the AI boom continues.
Nvidia's share price has already galloped nearly 1,600% over the past five years, yet it still remains a bargain at 26 times forward earnings. As the AI market expands, Nvidia's stock should continue its upward trajectory.
2. Broadcom
Known as Avago until its acquisition of the original Broadcom in 2016, Broadcom is a versatile chipmaker and software firm. A leading producer of mobile, data center, networking, wireless, storage, and industrial chips, Broadcom expanded into the software market by acquiring CA Technologies, Symantec's enterprise security unit, and VMware.
Broadcom may not be as AI-dependent as Nvidia, but it peddles numerous networking, optical, and custom accelerator chips for AI-geared data centers. Its sales of AI chips multiplied threefold in fiscal 2024 and made up 24% of its total revenue. For the full year, its total revenue and adjusted EPS increased 44% and 15%, respectively, with its 2025 outlook calling for a 21% revenue hike and a 36% surge in adjusted EPS.
During Broadcom's recent conference call, CEO Hock Tan pointed to a "huge" opportunity in the AI market "over the next three years" as its AI semiconductor business outgrows its non-AI chip sales. Broadcom's stock has already amassed a 620% five-year rally, but it still appears reasonably priced at 31 times forward earnings. Investors can expect this stock to remain a well-rounded play on the flourishing AI and cloud markets.
3. Taiwan Semiconductor Manufacturing
Without Taiwan Semiconductor, the world's largest and most advanced contract chipmaker, companies like Nvidia and Broadcom couldn't fabricate their top-tier chips. Taiwan Semiconductor manufactures the tiniest, densest, and most power-efficient chips, commanding nearly two-thirds of the global foundry market, according to TrendForce.
2024 saw Taiwan Semiconductor generate 51% of its revenue from the high-performance computing market, which encompasses Nvidia and other high-end chipmakers. The remaining revenue came from the smartphone, automotive, IoT, and digital consumer electronics markets.
Taiwan Semiconductor's revenue and EPS grew 30% and 40%, respectively, in 2024, primarily due to orders from AI-focused chipmakers. As its other non-AI markets — particularly PCs, smartphones, and memory chips — rebound, the company expects additional revenue and EPS growth of 28% and 29%, respectively, in 2025.
Taiwan Semiconductor's stock has risen over 220% in the past five years, but it remains affordable at 20 times forward earnings. Concerns about tariffs, export curbs, and tensions between Taiwan and China have caused its valuation to contract slightly, but it will remain a cornerstone of the AI market moving forward.
- The staggering growth rate of the AI market shown by Grand View Research over the next six years could lead to Nvidia's continued success, as it holds a dominant position in the graphics processing unit market and sees increasing demand for its chips in data centers for AI and machine learning tasks.
- Broadcom's diversified product offering, including networking, optical, and custom accelerator chips for AI-geared data centers, positions the company well to capitalize on the ongoing AI market growth. Its AI chip sales, which made up 24% of its total revenue in 2024, are expected to outgrow its non-AI chip sales in the coming years.
- As a key contract chipmaker for top AI chipmakers such as Nvidia, Taiwan Semiconductor Manufacturing plays an essential role in the AI market and stands to benefit greatly from the ongoing AI boom. The company generated 51% of its revenue from the high-performance computing market in 2024 and anticipates additional growth in 2025 as its other markets rebound.
- AI-dependent companies like Nvidia and to some extent Broadcom might see a significant advantage when it comes to the financial aspect. With exponential growth in the AI market, their earnings and stock prices could soar, providing investors with plenty of opportunities for investment.
