3 Core Tech Titans to Buy With $1,000 Right Now and Hold for the Next Decade
Finding core tech stocks to build a portfolio around can be a smart idea for investors. This sector has created the majority of value in the market for the past decade, and that will likely continue for the next decade as artificial intelligence (AI) innovations and breakthroughs occur.
Three that I think qualify for this segment are Alphabet (GOOG 1.05%) (GOOGL 0.75%), Microsoft (MSFT +4.95%), and Nvidia (NVDA 1.28%). Each of these looks like an excellent building block for a portfolio, and I think all will be a smart pick over the next decade.
Image source: Getty Images.
1. Alphabet
Alphabet is first on my list for a good reason: It’s the most solid of the three. Alphabet has a multi-pronged approach to AI, and its strategy so far has proven fairly solid.
First, it’s integrating AI into its core Google Search product. This has made Google the go-to for quick AI-generated information on a topic, and it’s a feature loved by the billions who use the product. Alphabet uses its own AI model to do this, leading to the second prong. Thanks to a strong generative AI model in Gemini, it can control its destiny with AI and its business.
Lastly, Alphabet has a thriving cloud computing wing, with Google Cloud growing faster than any of the major cloud providers in Q1. Google Cloud gives AI developers and companies a place to run AI workflows, so even if Alphabet’s model doesn’t come out on top, Google Cloud won’t be a flop, either.
Today’s Change
(-0.75%) $-2.58
Current Price
$341.13
Key Data Points
Market Cap
$4.2T
Day’s Range
$336.50 – $342.78
52wk Range
$171.73 – $408.61
Volume
463.1K
Avg Vol
30.6M
Gross Margin
60.43%
Dividend Yield
0.25%
This multifaceted approach has so far proven successful for Alphabet, and its stock has doubled over the past year. Still, there is more upside ahead for Alphabet if it can maintain its current growth pace, and I think it will be an AI force to be reckoned with for years to come.
2. Microsoft
Microsoft’s AI approach is very similar to Alphabet’s, except that it isn’t developing its own AI model. Instead, it has chosen to partner with OpenAI, the makers of ChatGPT. Microsoft owns about 27% of OpenAI, so it has a vested interest in its success. Microsoft’s Azure cloud computing platform remains neutral and offers developers countless large language models to deploy and use. However, Microsoft has integrated OpenAI’s products into all of its existing business productivity software via Copilot.
Today’s Change
(4.95%) $17.47
Current Price
$370.30
Key Data Points
Market Cap
$2.6T
Day’s Range
$355.44 – $370.51
52wk Range
$349.20 – $555.45
Volume
1.3M
Avg Vol
36.8M
Gross Margin
68.31%
Dividend Yield
1.01%
This has been a successful approach so far, but the stock hasn’t responded to Microsoft’s results as it has with Alphabet’s. Microsoft is down over 30% from its all-time high, and it looks like a screaming deal as the future is bright.
3. Nvidia
Last is Nvidia, which may seem like an odd choice. Current market sentiment is that Nvidia’s stock will decline once the AI build-out is wrapped up.
While that’s a fair take, it ignores the fact that computing units in data centers have relatively short lifespans and need to be replaced every couple of years. Furthermore, Nvidia will likely keep innovating and developing new computing units with enhanced capabilities that can cut costs and improve performance, which could justify upgrading old systems.
Nvidia is interwoven into nearly every AI product, and it will remain a vital company in the industry long after the initial build-out is complete. However, the market isn’t pricing any of that into Nvidia’s stock.
NVDA PE Ratio (Forward) data by YCharts
The stock trades for a mere 22.3 times forward earnings, and less than 16 times next year’s earnings. That’s a major bargain that doesn’t come around very often. With Nvidia being a core part of the AI build-out still expected to last for multiple years, the stock is a great buy now and a solid one to build a portfolio upon.
