Buying and holding shares of growing companies is a straightforward path to building wealth in the stock market. Here are two elite leaders in the technology sector that can help you grow your portfolio over the next 10 years.
1. Nvidia
Nvidia (NASDAQ: NVDA) market cap has tripled over the last 12 months as cloud service providers snap up the company’s highest-end chips to train and power artificial intelligence (AI) models.
Nvidia was founded in 1993 and created its first graphics processing unit (GPU) in 1999. Through the early 2000s, Nvidia’s GPUs became a preferred hardware choice for people who wanted to play video games on PCs, but in the last decade, the company found a new set of buyers for these chips — the data center market, which is now its largest business.
The data center segment now generates 86% of Nvidia’s revenue, but it’s got a long runway for growth ahead. There is an estimated $1 trillion worth of data center infrastructure that is in the process of transitioning from central processing units (CPUs) to GPUs for AI, which could lift Nvidia shares to new highs.
Over the next few years, Nvidia should continue to see strong demand for its hardware to train large language models for generative AI applications. Around two-thirds of organizations are using generative AI, up from one-third a year ago, according to McKinsey. This is driving more investment in AI infrastructure, as was reflected in the 427% year-over-year increase in Nvidia’s data center revenue last quarter.
With more companies preparing to launch generative AI apps, the data center infrastructure required to support them will continue to grow. This will be a huge benefit for Nvidia, which controls an estimated 70% or more of the AI chip market.
Nvidia has dominated the GPU market for many years, but its opportunity in AI is still in its early innings, and could still deliver outstanding returns for patient investors.
2. Microsoft
Tech giant Microsoft (NASDAQ: MSFT) also has the wind in its sails right now. It has successfully leveraged its investment in generative AI developer OpenAI to unleash new features across its products to drive demand. AI-powered features in Windows, Office, and Bing search are opening new revenue opportunities for the software leader, and it’s just getting started.
The stock has hit new highs this year as Microsoft continues to report solid financial results. Revenue grew 17% year over year in its most recently reported fiscal quarter, driven by balanced growth across 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 are using Microsoft’s Azure OpenAI cloud services. Its Intelligent Cloud business was its fastest-growing segment last quarter, with revenue up 21% year over year.
Microsoft Copilot is also proving to be a game changer for working professionals. That AI-powered assistant — available on Windows, Office, and other products — is a huge opportunity for Microsoft to continue growing its software business. For example, 88% of software developers that 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 produce growing profits to fuel returns to shareholders. Earnings per share grew by 20% year over year in its fiscal 2024 third quarter, which ended March 31, and the consensus estimates on Wall Street are that its earnings will keep growing at double-digit percentage annual rates over the long term.
When an already-dominant company like Microsoft can still deliver market-beating returns, its stock should be a no-brainer choice for growth investors.
Should you invest $1,000 in Nvidia right now?
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John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Elite Growth Stocks to Buy and Hold for the Next Decade was originally published by The Motley Fool
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