Sure, there's a lot of hype surrounding artificial intelligence (AI). It always happens with hot technologies. But don't think for a second that AI is only a fad. The advances we've seen over the last year or so are just the beginning.
As a result, investors still have a tremendous opportunity to make money in the coming years. Here are three unstoppable AI stocks to buy and hold for the next decade (listed in alphabetical order).
1. Alphabet
Anyone who thought that Alphabet (GOOG 0.48%) (GOOGL 0.31%) would be left in the dust in the AI race is probably rethinking that position now. Admittedly, the company appeared to be blindsided by the early success of OpenAI's ChatGPT. And Google Cloud's less-than-impressive growth in the third quarter was widely chalked up to a perceived AI shortcoming.
NASDAQ: GOOGL
Key Data Points
However, Alphabet seems to have changed the narrative quite a bit with the introduction of its new Gemini AI model. The most powerful version of the model, Gemini Ultra, outperforms OpenAI's GPT-4 and beats human experts on the MMLU (massive multitask language understanding) test.
I think that Google Cloud will return to its previous growth trajectory, thanks to Gemini. Even if that's overly optimistic, the company's cloud platform should have huge growth prospects as customers flock to the cloud to build generative AI apps.
What about the possibility that Alphabet's search business could be disrupted by AI? I predict that it will -- but not in the way that some envision. My view is that search won't be replaced by AI. Instead, I expect that Google's use of AI will enhance its search functionality and make it more profitable.
2. Amazon
Amazon (AMZN +0.30%) was another AI leader that appeared to have been initially caught off guard by ChatGPT's popularity. Like Alphabet, though, the e-commerce and cloud services giant quickly rolled out its own generative AI capabilities.
NASDAQ: AMZN
Key Data Points
My take is that Amazon is on the right track with Amazon Bedrock. This service allows Amazon Web Services (AWS) customers to quickly build generative AI apps with a range of tools at their disposal.
I'm also in full agreement with Amazon CEO Andy Jassy about the long-term potential for AWS because of AI. Jassy said in the company's Q3 conference call, "[C]ustomers want to bring the [AI] models to their data, not the other way around. And most of that data resides in AWS as the clear market segment leader in cloud infrastructure."
Investors have definitely noticed Amazon's renewed focus on increasing profitability. I anticipate that those profits will continue to grow robustly for years to come as the company harnesses the power of AI across all of its businesses.
3. Microsoft
My inclusion of Alphabet and Amazon among the unstoppable AI stocks to buy and hold doesn't mean that I think they'll grow at the expense of Microsoft (MSFT +2.20%). That's not the case at all. I believe that Microsoft will remain one of the biggest AI winners for a long time to come.
NASDAQ: MSFT
Key Data Points
Microsoft's significant investment in OpenAI could go down as one of the smartest business development moves in corporate history. The two companies are now joined at the hip. And it shows with OpenAI's GPT-4 technology integrated throughout Microsoft's products.
I'm not concerned about the recent soap opera with the firing and prompt rehiring of Sam Altman as OpenAI's CEO. OpenAI -- and Microsoft, by extension -- will almost certainly continue to pioneer AI breakthroughs.
Like Alphabet and Amazon, Microsoft is poised to profit tremendously as customers move their apps and data to the cloud. AI should also help the Seattle-based tech giant in many other ways, including attracting more customers to its AI-enhanced productivity tools.
