Growth stocks can be some of the best tools an investor has to build wealth for retirement. With some of the largest companies in the world in great positions to capitalize on the rising adoption of artificial intelligence (AI), you can put yourself in a solid position to earn excellent returns without taking a chance on unproven start-ups.
Here are two elite growth stocks to buy today and hold for the long term to help you capitalize on AI.
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1. Nvidia
Nvidia (NVDA +2.27%) stock has surged close to its previous highs following its latest strong quarterly earnings report in May. In addition to supplying its powerful chips to data centers, the company has adapted its graphics processing unit (GPU) technology for other markets, including automotive, gaming, and professional graphics.
The data center market is the company's largest growth driver right now. Last quarter, its sales to data centers grew 73% year over year to $39 billion, accounting for 88% of its total business. Analysts expect surging demand for Nvidia's new Blackwell chips to boost its full-year revenue to $200 billion.
NASDAQ: NVDA
Key Data Points
With data center operators and hyperscalers expected to spend $1 trillion annually on infrastructure by 2029, according to Dell'Oro Group, Nvidia's revenue could grow quite substantially from there. It has been investing in GPU innovation for decades, and as a result, controls the lion's share of the market. In the desktop GPU market alone, its share is estimated to be 92%.
The demand for more advanced AI computing systems isn't slowing down. Nvidia is working with companies worldwide to build AI factories -- new types of data centers designed specifically for AI workloads. Nvidia reported seeing an accelerating deployment of these AI-optimized data centers last quarter.
Nvidia is also positioned to help companies build world-changing products like humanoid robots with its Isaac GR00T N1 robot development platform. In the view of CEO Jensen Huang, general-use robots could become a multitrillion-dollar industry. Nvidia could also benefit from the growth of autonomous vehicles thanks to its DRIVE computing platform. Its automotive revenue grew 72% year over year last quarter to $567 million.
The stock trades at 33 times forward earnings estimates. This is a reasonable forward price-to-earnings multiple for a company that is providing the essential computing hardware for the AI era.
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2. Alphabet
Alphabet (GOOG +3.92%) (GOOGL +3.88%) owns some of the most widely used digital services, including YouTube, Google, Android, and Gmail. After the stock fell earlier this year, it's trading at an attractive valuation that may undervalue Alphabet's opportunities in AI.
Seven of its products boast more than 2 billion users each. This large installed base of users fuels its advertising business: Alphabet's revenue grew by 12% year over year in Q1 while operating income grew by 20%.
NASDAQ: GOOGL
Key Data Points
Google Search is benefiting from growing user engagement following the launch of new features such as AI Overview. These AI-powered search summaries provide quick explanations for almost any topic, and they appear to be leading to more search queries and more ad revenue opportunities.
Google Gemini, its large language model (LLM) chatbot, is now powering many of the company's services. Companies are migrating their data systems to Google Cloud to use AI services for building applications and data analytics. Revenue from Google Cloud grew 28% in the first quarter, and it's starting to have a meaningful impact on the company's profitability, as the segment's operating income more than doubled to $2.2 billion.
This is strong growth for a stock trading at just 19 times 2025 earnings estimates. One reason for Wall Street's cautious valuation of the stock is the concern that other leading LLM makers like ChatGPT owner OpenAI could pull ahead of Alphabet in AI and draw users away from its highly profitable Google Search business.
However, investors shouldn't underestimate the amount of money that Alphabet has to invest in AI. The $75 billion in free cash flow it generated over the last year was more than twice what it generated five years prior. And that was after it laid out $57 billion in capital expenditures for technology infrastructure, AI, and data centers.
These investments have made Gemini one of the top AI models out there, which could bring more useful features to its services that protect Google's competitive moat, which helps explain why now would be a great time to start an investment in Alphabet. As the company continues to grow its cloud and advertising businesses, the stock could outperform the broader market.
