Did you miss Nvidia? The best AI stocks to buy and hold

Of all the “Magnificent Seven” stocks, no one comes close to such returns. Nvidia posted. The company’s stock price has soared 221% in the past 12 months alone (as of February 6th). Probably no one has ever benefited from this more. artificial intelligence (AI) Boom.

It’s understandable to worry that you’ve missed the Nvidia boat. But there are still reasons to be optimistic.Let’s take a closer look alphabet (GOOG 2.04%) (Google 2.12%)this might be the best AI stock to buy and hold.

Nvidia’s rise is justified

Delivering chips that power AI use cases is a thriving business and is driving Nvidia’s growth. The company’s third quarter fiscal 2024 sales were $18.1 billion, more than triple the same period last year, demonstrating the strong demand the company is receiving. Moreover, the business has recorded a sharp increase in profits.

The global AI market is expected to grow nearly nine times over the next seven years, and Nvidia sees significant opportunities to continue to grow. This confirms investors’ extreme bullishness about Nvidia being a smart AI infrastructure business.

However, due to the stock’s rapid rise, it now appears to be overvalued.Stock trading is stock price earnings ratio 89.7’s. Regardless of the growth potential, this remains a high price to pay for prospective investors.

Alphabet is not new to AI

In Q4 2023, Alphabet reported digital ad revenue of $65.5 billion, an 11% increase year-over-year. However, the numbers disappointed Wall Street, and the stock price fell after the announcement. The stock is currently trading at a P/E ratio of 24.9 times. This is a good entry point for investors to own his AI leader.

CEO Sundar Pichai said more than seven years ago that Alphabet would be “AI first.” This was long before ChatGPT was introduced in late 2022 and the race among technology companies to launch AI products and services began.

“The past 10 years have been about building a mobile-first world and turning our phones into the remote controls of our lives,” he wrote in an October 2016 blog post. is an AI-first world, a world where computing has become universally available: at home, at work, in the car, on the go, and where interaction with all these surfaces has become more natural and intuitive. Above all, more It’s intelligent.”

To be fair, Alphabet is already integrating AI into its various services. In fact, the company started developing machine learning features in its Google Search in 2001 to help users improve their spelling when searching. Today, AI is being used to provide traffic information in Maps, better organize and search in photos, and various tools provided by Google Cloud. These are just some examples.

Looking to the future, we have more powerful AI capabilities in the pipeline. When it comes to the cloud space, Gemini, a recently introduced generative AI platform, helps clients build and launch unique apps for their own customers.

Alphabet is in a great position because it already has a huge user base that allows it to test new features, collect data, and iterate on improvements in a continuous cycle. Six of the company’s products and services have more than 2 billion users.

It also helps that Alphabet is incredibly profitable, with $102 billion in revenue. Operating cash flow Net cash balance will reach $98 billion in 2023. This provides financial resources to continue pouring capital into research and development initiatives. Few companies can match Alphabet in terms of large investments. In this case, this strategy will only strengthen the company’s already strong competitive position.

So while most investors out there are still fascinated by companies like Nvidia, the best way to get exposure to innovative technology trends is with companies that are often taken for granted. And it’s like an alphabet. That makes it a great AI stock to buy and hold for the long term.