2 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

Key Points

• Nvidia and Alphabet are two outstanding businesses leading the charge in AI that can deliver solid returns for many years.

• Nvidia sees the data center infrastructure market being worth at least $3 trillion by 2030, yet its stock is cheaper than Walmart on a price-to-earnings basis.

• Alphabet's Google is not an advertising business; it's a giant AI factory.

• 10 stocks we like better than Nvidia ›

Holding quality growth stocks is an efficient way to build wealth for retirement. Investors considering putting money to work in the stock market don't need to overthink it. The biggest and most profitable companies in the world are the ones enabling the next industrial revolution, which is artificial intelligence (AI).

If you're interested in this opportunity, here are two outstanding businesses leading the charge in AI that can deliver solid returns for many years.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

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1. Nvidia

Wall Street is underestimating the long-term opportunity in AI. Even with Nvidia (NASDAQ: NVDA) stock up 54% over the last year and sitting close to a new high, it trades at just 29 times next year's earnings estimate. This is while Nvidia is solving the most complicated computing problem the world has ever seen, which is AI.

Nvidia is the dominant supplier of chips used for the most advanced AI workloads in data centers. Its graphics processing units (GPUs) are in every major cloud platform. Nvidia's revenue grew 56% year over year last quarter, with sales to data centers making up 88% of its total revenue.

Nvidia has led the GPU market for many years, but its competitive moat is not necessarily based on its chip innovation but software programs. For example, CUDA allows Nvidia's customers to essentially program the GPU to optimize performance for different use cases. The number of developers using CUDA has grown from nearly 3 million in fiscal 2022 to more than 5.9 million in fiscal 2025. This growing network of developers is strengthening Nvidia's competitive advantage.

But innovation is an important advantage for Nvidia, too. Advances in CUDA have enabled developers to more than double the performance of its latest Blackwell chips since launch.

Nvidia believes the data center infrastructure market will grow to between $3 trillion to $4 trillion by 2030. There is substantial growth still ahead, yet investors can buy Nvidia stock at a lower forward price-to-earnings (P/E) multiple than Walmart, which makes the leader in AI chips a bargain.

2. Alphabet (Google)

For a long time, investors have known Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) as a leading digital advertiser that specializes in AI. But it's probably time to flip that around. The growth in Google's cloud business and investments in its Gemini AI model, which powers seven of its products with more than 2 billion users, has made it a leading AI company.

Advertising still generates nearly three quarters of Alphabet's revenue. It's a profitable business that helped Alphabet generate $133 billion in cash from operations over the last year, but it's where management is investing those resources that matters. Google plans to spend around $85 billion this year to support the buildout of more data center capacity for its cloud computing business.

Gemini powers AI Overviews in Google Search, recommendations in YouTube, and enterprise application building tools in Google Cloud. Without AI, Alphabet wouldn't be able to offer useful services for users and ultimately grow these businesses over the long term.

Alphabet's competitive advantage is based on owning all the important assets that enable AI, from hardware to software. In addition to Gemini, Google offers cloud customers its proprietary custom AI chips, or Tensor Processing Units (TPUs), for cost-efficient data processing. Google Cloud revenue grew 32% year over year in the second quarter, putting it on pace to generate more than $54 billion on an annual run-rate basis.

Management sees strong demand for AI services continuing into next year, causing it to raise its full-year guidance for capital spending to support growing demand for AI. Analysts expect the company's earnings to grow at an annualized rate of 15%, which should support market-beating returns given the stock's reasonable forward P/E of 23 on 2026 earnings estimates.

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 Alphabet, Nvidia, and Walmart. The Motley Fool has a disclosure policy.