Although the hype has reached new heights over the past year, artificial intelligence (AI) has been around for a while, and the hype continues. Bloomberg Intelligence (BI) estimates that the generative AI market could grow more than 40% annually and reach $1.2 trillion by 2032. This level of growth will also create an estimated $280 billion in new revenue opportunities for software alone.
Emerging new industries are exciting, but picking long-term winners can be difficult. As any investor knows, the most prolific companies of the next 20 years may not yet exist. This suggests that casting a wide net may be the best investment strategy. In this case, the best approach may be to find early winners, own their shares, and track how AI progresses over time.
After examining dozens of companies, these five companies stood out for their strong position to lead the industry’s growth. Consider buying and holding these AI stocks. They have achieved pole position in the AI industry and have the potential to generate life-changing investment returns over the next decade or more.
1. Nvidia: This company owns an estimated 90% of the AI chip market
Artificial intelligence (AI) may seem to have become Wall Street’s hottest trend overnight.Graphics chip companies that look just as quick Nvidia (NVDA -1.68%) It dominates the market for chips used to power AI models (controlling 90% of the market). One of its competitors, Advanced Micro Devicespredicts that the AI chip market will grow to $400 billion in the next few years.When I calculated it, Nvidia’s company-wide Revenue is expected to jump $45 billion over the past year.
Competitors will chase Nvidia, but the company’s high-performance chips, combined with popular CUDA computing software optimized to take full advantage of them, make it the industry’s turnkey package of choice. It will be created. Perhaps Nvidia’s competitors were not ready for his AI surge. The stock has risen more than 230% in the past year alone, and long-term demand for AI chips seems poised to push the stock higher as NVIDIA grows.
2. ASML: Cutting-edge chip manufacturing relies on one manufacturer
Ironically, most chip companies, including Nvidia, don’t manufacture their own chips. They just design. Chip factories, called fabs, are built and require state-of-the-art machinery to form complex patterns on silicon wafers. ASML (ASML 0.58%) designs and builds extreme ultraviolet lithography (EUV) machines used to manufacture the most advanced chips on the market today.
Notably, ASML only company That’s what makes this type of machine. This machine is so complex that transporting it will require 13 shipping containers and 250 wooden crates, each costing up to $400 million. Of course, AI and technology in general will continue to evolve. To make better chips, breakthroughs will require increasingly better machines. ASML should be a long-term beneficiary of the AI boom.
3. Palantir: Companies are flocking to use this company’s custom software applications.
While big technology companies are investing in building sophisticated computer systems, small and medium-sized businesses want to leverage AI technology to run their businesses. For this reason, Palantir Technologies (PLTR 0.87%) Growth is starting to take off. The company sells custom software applications built on his three proprietary platforms: Gotham, Foundry, and AIP. Specifically, AIP was designed for building and deploying AI in commercial applications.
Palantir derives more than half of its revenue from government customers, with the U.S. government being its largest and oldest customer. However, the commercial sector is doing well. Palantir’s enterprise customer base grew 55% year-over-year in the fourth quarter and 22% over the past three months to 221 companies. This is just a few hundred companies in a broader enterprise environment of millions. If companies around the world need AI to compete, Palantir has the potential to grow for years.
4. Supermicro: Turnkey server systems are in high demand and this company is hot.
super microcomputer (SMCI 14.02%)Over the decades, the company known as Supermicro has evolved from selling components to complete IT solutions. But the explosion in data center demand for AI is starting to hit his Supermicro, and the business is starting to take off. The company’s revenue growth is accelerating, and management believes it will double its total revenue for the current fiscal year, which ends in the summer.
Again, that success is significant. Businesses need his AI capabilities, but non-technical companies would be far better off hiring a third party like Supermicro to build their systems for them. The modular design allows you to easily expand your system as your computing needs grow over time. Management estimates that the company is growing five times faster than the industry as a whole. This means that customers are choosing the company over other companies. This is promising for Supermicro’s long-term trajectory and shareholders alike.
5. Microsoft: Partnering with the creator of ChatGPT is a potential goldmine
The AI hype may have started with ChatGPT, a generative AI chatbot built by OpenAI.tech giant microsoft (MSFT -0.72%) jumped at the opportunity to strengthen its partnership with OpenAI and connect OpenAI’s growth to its cloud platform, Azure. It is already bearing fruit. Microsoft reported accelerating Azure growth in its latest quarter, noting that more than half of Fortune 500 companies are already using Azure and his OpenAI in their business. Azure is the world’s second largest cloud platform, a close runner-up. AmazonThis is AWS.
But with Microsoft, you get a diversified business with revenue streams from the cloud, gaming, enterprise software, and more. Its huge size and deep pockets give it a higher floor than most stocks you’ll come across. Of course, a $3.1 trillion market cap means it’s probably too big to be a billionaire on your own. Instead, expect your portfolio’s performance to generally increase steadily over time.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Justin Pope has no position in any stocks mentioned. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Amazon, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool recommends Super Micro Computers and recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
