2 Elite Growth Stocks to Buy and Hold for the Next Decade

Buying and holding growth stocks is a sure-fire way to build wealth in the stock market. Here are two elite leaders in the tech sector who can help you grow your portfolio over the next 10 years.

1. Nvidia

Nvidia (NVDA 4.57%) Its market capitalization has tripled in the past 12 months as cloud providers buy up the company’s top-of-the-line chips to train and run artificial intelligence (AI) models.

Nvidia was founded in 1993 and created its first graphics processing unit (GPU) in 1999. In the early 2000s, Nvidia’s GPUs became the hardware of choice for people who wanted to play video games on their PCs. In the last decade, however, the company has found a new audience for these chips—the data center market, which is now its largest business.

The data center segment currently accounts for 86% of Nvidia’s revenue, but it has a long way to go. The estimated $1 trillion in data center infrastructure is in the process of transitioning from central processing units (CPUs) to graphics processing units (GPUs) for AI, which could drive Nvidia’s stock to new highs.

Nvidia should continue to see strong demand for its hardware for training large language models for generative AI applications over the next few years. About two-thirds of organizations are using generative AI, up from one-third a year ago, according to McKinsey. That’s driving greater investment in AI infrastructure, reflected in a 427% year-over-year increase in Nvidia’s data center revenue last quarter.

As more companies prepare to launch generative AI applications, the data center infrastructure required to support them will continue to grow. That will be a huge benefit to Nvidia, which controls an estimated 70% or more of the AI ​​chip market.

Nvidia has dominated the GPU market for many years, but its potential in the area of ​​artificial intelligence is still in its early stages and has the potential to bring excellent returns to patient investors.

2.Microsoft

Tech giant Microsoft (MSFT 0.32%) also has the wind in its sails now. It successfully leveraged its investment in generative AI developer OpenAI to unleash new features in its products to drive demand. AI-powered features in Windows, Office, and the Bing search engine are opening up new revenue opportunities for the software leader, and that’s just the beginning.

The stock has reached new highs this year as Microsoft continues to report solid financial results. Revenue rose 17% year over year in its most recent reported fiscal quarter, driven by balanced growth in productivity software, cloud services, Windows, search, advertising and gaming.

Microsoft has been investing heavily in its AI infrastructure technology, and it’s paying off. Two-thirds of the Fortune 500 use Microsoft’s Azure OpenAI cloud services. Its intelligent cloud business was its fastest-growing segment last quarter, with revenue growing 21% year over year.

Microsoft Copilot is also proving to be a game-changer for working professionals. The AI-powered assistant—available in Windows, Office, and other products—is a huge opportunity for Microsoft to continue to grow its software business. For example, 88% of software developers who have used GitHub Copilot say they are more productive after using it.

The best thing about Microsoft is that it can deliver these innovative software tools and still generate growing profits to drive shareholder returns. Earnings per share rose 20% year over year in the third quarter of fiscal 2024, which ended March 31, and the consensus estimate on Wall Street is that earnings will grow at a double-digit percentage rate year over year over the long term.

If an already dominant company like Microsoft can still outperform the market, its stock should be an obvious choice for growth investors.