Fortune Business Insights expects the global artificial intelligence (AI) market to grow at a compounded annual growth rate of 29.2% from $294.1 billion in 2025 to $1.77 trillion in 2032. However, this explosive growth also depends on the availability of computing power and cloud computing infrastructure.
Intel (INTC 6.25%) and Alphabet (GOOG 2.13%) (GOOGL 2.18%) are playing a crucial role in providing the building blocks needed for an AI infrastructure buildout. Intel is developing advanced chips that power complex AI models, while Alphabet is providing AI-optimized cloud infrastructure.
Even a small stake in any of these stocks can go a long way in the next few decades. You also don't need boatloads of cash to do that. If you have $500 in excess funds that are not required to pay bills or for contingencies, then either of these two stocks could generate impressive long-term returns.
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1. Intel
Intel's turnaround is now gaining traction. The company delivered better-than-expected earnings results in the third quarter of fiscal 2025 (ending Sept. 27, 2025). Revenues were up 3% sequentially to $13.7 billion, above the higher end of its guidance. The company's non-GAAP earnings per share of $0.23 were also higher than the company's expectations of breakeven performance.
NASDAQ: INTC
Key Data Points
Intel also managed to strengthen its balance sheet with $20 billion in cash from a few deals, including funding received from the U.S. government and SoftBank Group, and the sale of stakes in and Mobileye. The company had $30 billion in cash on its balance sheet at the end of the third quarter. Intel also expects Nvidia's $5 billion investment to close in the fourth quarter, further strengthening its financial position.
Data centers are increasingly utilizing CPUs in AI servers and for storage compute. The demand is expected to rise even further as inference workloads (the real-time deployment of AI models) start exceeding AI training workloads. The increasing demand from hyperscalers for CPUs, which consume less power and reduce the total cost of ownership (TCO), has created a short-term supply demand mismatch. Intel is also benefiting from the rising adoption of AI PCs, especially as it has coincided with the Windows 11 refresh cycle.
Intel is also experiencing strong momentum in its foundry business. The yields on the company's 18A process node (next-generation chip manufacturing technology) are progressing at a solid pace. 18A will support the upcoming launch of Panther Lake processors. Intel's high-volume manufacturing site, Fab 52 in Arizona, is now fully operational to support 18A production. The company's next-generation 14A process node is also generating interest from potential customers.
Intel has returned to profitability in the third quarter, after six consecutive quarters of losses. This improvement is driven by better execution, strong demand for CPUs in AI servers, and improving prospects in the foundry business. The company's forward price-to-earnings ratio remains elevated due to its volatile and recovering profitability. But the company is now trading at 3.57 times sales, which is very modest for a prominent semiconductor player positioned to benefit from the massive AI infrastructure buildout.
Considering these robust tailwinds, Intel seems well-positioned to emerge as a smart pick in the coming decades.
2. Alphabet
Alphabet is successfully leveraging its AI capabilities to drive overall business growth. In the third quarter of fiscal 2025 (ending Sept. 30, 2025), revenues rose 16% year over year to $102.3 billion, while operating income was up 22% year over year to $31.2 billion. The company also generated free cash flow of $24.5 billion in the third quarter and $73.6 billion in the trailing 12 months. Search, YouTube, and Google Cloud businesses have demonstrated impressive growth. The company is also committed to optimizing costs in areas such as headcount growth, real estate footprint, and data center buildout.
NASDAQ: GOOG
Key Data Points
Alphabet's AI technologies are helping expand its Search capabilities. AI Overviews and AI Mode are handling a higher volume of total and commercial queries. Management also claimed that the monetization of advertisements displayed below and within the AI's response in AI Overviews is monetizing at the same rate as those shown in traditional search results. AI Overviews has scaled to over 2 billion users, while AI Mode has over 75 million daily active users.
Google Cloud is also evolving as a durable and strong growth engine. Its revenues rose 34% year over year to $15.2 billion, while its operating margin was 23.7% in the third quarter. Enterprises are increasingly adopting its optimized cloud stack, including its customized TPUs and GPUs, Gemini 2.5 and other AI models, and core cloud infrastructure and associated services such as cybersecurity and data analytics. Google Cloud's contracted backlog was $155 billion at the end of the third quarter, up 82% on a year-over-year basis. The high multi-year revenue visibility is a solid positive for the company.
YouTube remains the top-ranking streaming platform in the U.S. based on watch time. AI technologies are now used to streamline content creation workflows, as well as improve monetization and advertising opportunities. YouTube's "twin engine" monetization strategy is also bearing results, as both advertisements on the platform and YouTube subscriptions are delivering impressive results.
Alphabet is currently trading at 25.6 times forward earnings. This seems reasonable considering the company's multiple long-term AI-powered catalysts and strong financials. Hence, it may be a worthwhile move to buy and hold a stake in this stock for the next few decades.
