The artificial intelligence (AI) infrastructure market is continuing to boom, and this is still a great place to look to invest. Let's look at two AI stocks that investors can buy now and hold for the next decade.
Image source: Getty Images.
Broadcom
One of the most exciting AI stocks to own right now for the long term is undoubtedly Broadcom (AVGO 1.63%). The AI infrastructure market is booming with no signs of let-up in sight. At the same time, data center networking is becoming more important as AI chip clusters grow, while there has also been a shift toward companies looking to create their own custom AI chips to save costs.
As the inference market eventually outpaces training over the coming decade, AI ASICs (application-specific integrated circuits) should begin to take more share away from graphics processing units (GPUs), which are currently the primary chips used to power AI workloads.
NASDAQ: AVGO
Key Data Points
This is all great news for Broadcom. The company is a top player in data center networking, where its Tomahawk Ethernet switch is a leading solution within AI data centers. Meanwhile, the company helped Alphabet create its highly successful tensor processing units (TPUs), which look poised to become a huge growth driver as Alphabet aggressively builds out its AI infrastructure and starts letting customers use its chips for their AI workloads, as well. Anthropic has already placed a $21 billion TPU order to be delivered this year for use within Google Cloud. Meanwhile, other companies, including OpenAI, are also working with Broadcom to develop their own custom AI chips.
Between networking and custom AI chips, Broadcom has one of the biggest growth opportunities in the AI space over the next decade.
Taiwan Semiconductor Manufacturing
Another huge beneficiary of the AI infrastructure buildout is Taiwan Semiconductor Manufacturing (TSM 5.03%). The company is the leading manufacturer of chips in the world, and it has a near monopoly on making advanced chips. As competitors have struggled with achieving high yields for advanced chips, TSMC has become the go-to partner for chip designers and is working in lock step with them to increase capacity to meet surging demand. Best of all, it benefits from both GPU and AI ASIC growth.
NYSE: TSM
Key Data Points
TSMC's position in the industry has also given it strong pricing power, which has helped it boost its gross margins. According to reports, it has already informed customers of a four-year price hike schedule. Between boosting its capacity and price increase, TSMC looks poised to be a long-term winner in the AI infrastructure space.
