The idea of buying and holding stocks forever can feel a bit cliché at times. The reality is that it's extraordinarily difficult to find stocks worthy of permanent spots in your portfolio. It's even more challenging when you apply that to growth stocks, which investors often find in emerging industries where it's uncertain which companies will lead or for how long.
That said, there's no harm in doing the exercise. After all, there aren't any rules against selling later on if things don't work out. In the meantime, this mindset will hone your focus on looking for the very best companies the market has to offer.
Ready to start? Already ahead of you. Nvidia (NVDA +0.25%), Microsoft (MSFT +2.21%), and Meta Platforms (META 0.06%) jump off the page as entrenched tech stalwarts with significant artificial intelligence (AI) growth potential, which might ultimately be one of the biggest investment opportunities of this generation.
Image source: Getty Images.
Nvidia is entrenched as the gold standard of AI compute
Once the data center supercycle began, Nvidia's graphics processing units (GPUs) quickly became the de facto chips for training AI models. That continues and has made Nvidia the world's largest tech company in the process. Although competition from custom silicon chips has crept in, it hasn't derailed Nvidia's blistering growth. CEO Jensen Huang has noted that Nvidia anticipates more than $1 trillion in orders through next year for its flagship Grace Blackwell and upcoming Vera Rubin chip platforms.
NASDAQ: NVDA
Key Data Points
Eventually, the data center boom will slow. But Nvidia will likely remain a top AI stock because of all the directions it can still go as AI investment and innovation expand beyond data centers. Nvidia has its sights set on physical AI, with software and hardware ecosystems built for autonomous vehicles and humanoid robotics. The company recently expanded its partnership with Palantir Technologies to give the U.S. government and other critical tech infrastructure operators access to Nvidia's GPUs and open-source AI models on Palantir's application software.
In the meantime, Nvidia is raking in billions of dollars in cash flow from its GPU sales, and that figure is rising quickly as Nvidia's explosive growth continues. Jensen Huang had Nvidia ready to dominate the AI market from day one, so it's difficult to bet against him as he guides Nvidia into an exciting but volatile AI future.
Microsoft has the inside track on AI at the enterprise level
You can't stay atop the tech world without evolving. Microsoft has continued to learn new tricks over the years, from personal computer software to cloud computing and AI, all while its legacy products remained relevant and continue to have strong pricing power. Today, countless companies, from small businesses to massive corporations, depend on Microsoft's software products and cloud computing services in one form or another.
NASDAQ: MSFT
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Microsoft's various offerings make it a one-stop shop for enterprises, creating powerful network effects. Is Microsoft always the best at everything? No, but it's often easier and cheaper for enterprises to use whatever Microsoft offers than to go outside the ecosystem to another vendor. Like with other previous innovations, Microsoft has an inside track to sell AI technology, as it can simply roll it out to customers.
Admittedly, Microsoft's AI app, Copilot, has struggled to gain traction. But the company is pivoting after initially relying too heavily on its partnership with OpenAI. Microsoft's entrenched advantages are powerful, so when the smoke clears, it shouldn't surprise anyone if the company does just fine with AI. Despite the criticisms, Microsoft's Azure currently has $625 billion in commercial remaining performance obligations, suggesting the business is doing just fine.
Meta Platforms is an advertising juggernaut built on social media dominance
There aren't many publicly traded monopolies you can invest in, but Meta Platforms might be one of them. Its social media apps, Facebook, Instagram, WhatsApp, and Threads, combine for 3.56 billion daily active users. This massive user base generates a ton of first-party data that Meta leverages to serve ads, a highly lucrative business model that continues to grow by leaps and bounds.
NASDAQ: META
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Co-founder Mark Zuckerberg is still the CEO and is only 42 years old, a rarity for such a successful company. Mark Zuckerberg swings for the fences. It doesn't always work -- just look at Reality Labs -- but he also acquired Instagram and WhatsApp. The company's all-out push into AI has strengthened its core advertising business while opening new growth opportunities in cloud computing and AI glasses.
Meta Platforms isn't a stock for everyone. Its social media apps have attracted criticism and lawsuits for their addictive nature. Despite all that, Meta Platforms is such a strong advertising company that it can afford huge mistakes and still deliver double-digit growth year in and year out. That's a business worth buying and holding, especially with such seasoned but young leadership.
