There's been a lot of volatility in the market lately, which has understandably made many investors rethink which stocks they should be invested in and which will stand the test of time.
While there are certainly no guarantees, three companies that are in great shape to benefit from their leading technology positions are Nvidia (NVDA 1.53%), Alphabet (GOOGL 1.66%) (GOOG 1.69%), and Taiwan Semiconductor (TSM 4.96%). Here's why each one is worth buying now and holding in your portfolio for years to come.
Image source: Getty Images.
1. Nvidia isn't going anywhere
Many people are trying to figure out whether we're in an artificial intelligence bubble right now and if it's still a smart idea to buy Nvidia, the leading designer of artificial intelligence (AI) processors.
There's nothing wrong with making sure you're not jumping on a trend at the end of its cycle, but ignoring Nvidia stock out of those fears might be a mistake. That's because tech companies continue to increase spending on AI data center infrastructure, which will drive more purchases of Nvidia's processors.
Consider that Alphabet recently announced it would double its capital expenditures to up to $185 billion this year, and Meta said it was doing nearly double its spending, with its capex jumping to up to $135 billion. Just a few days after those announcements, Amazon said it's pushing its spending up to $200 billion this year -- with all of these companies citing the need for building out more data center infrastructure and AI compute power.
If all of that's not enough to convince you to buy Nvidia stock, consider that its shares have a price-to-earnings (P/E) ratio of about 47 right now, which is only slightly more expensive than the tech sector average P/E of about 43.
NASDAQ: NVDA
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2. Alphabet has plenty left in the tank
The first clear AI success for Alphabet has been its Gemini chatbot, which now has 750 million monthly active users -- a 67% jump from just nine months ago. And the company recently struck a new collaboration with Apple that will make Gemini the underlying artificial intelligence model for an upcoming version of Siri.
That collaboration will be worth multiple billions of dollars for Alphabet over the next few years, according to the Financial Times, and is structured as a cloud computing deal. Those sales will build on Alphabet's already impressive Google Cloud revenue, which was up 48% in the Q4 to $17.7 billion.
And as I mentioned earlier, Alphabet is doubling its capex spending this year, which should help the company stay relevant in the rapidly shifting AI market. Investors also get a relative deal buying shares right now, with Alphabet stock trading at a P/E ratio of just 30.
NASDAQ: GOOGL
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3. Taiwan Semiconductor benefits no matter who wins in AI
Taiwan Semiconductor, or TSMC, is the leading semiconductor manufacturing company in the world with a 70% market share. The company makes some of the most advanced chips in the industry, with higher yield rates than Samsung and Intel, and it's often the go-to choice for tech giants in need of AI processors.
If you really want a company with a long-term competitive advantage, consider that research from Morningstar says TSMC's organic growth driven by major tech trends could last for decades.
NYSE: TSM
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TSMC is already benefiting from the surge in AI processor needs, with revenue increasing 30% to $122.4 billion in 2025 and diluted earnings rising 47% to $10.65 per American depositary receipt (ADR). TSMC management is confident of the path the company is on and issued guidance for a 30% increase in sales this year. And just like the other two AI stocks on this list, TSMC's stock is well priced, with a P/E ratio of just 34.
