Got $5,000? 3 Tech Stocks to Buy and Hold for the Long Term.

If you're looking for growth stocks, the tech sector is hard to beat. While the S&P 500 index is up 97% over the last five years, the tech-heavy Nasdaq-100 has gained 133%. And there are plenty of tech companies that have done even better than that.

If you have $5,000 you're ready to invest now, you could open solid starting positions in Taiwan Semiconductor Manufacturing (NYSE: TSM), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), and IonQ (NYSE: IONQ).

Let's take a look at each of these tech leaders to see what makes them stand out.

Image source: Getty Images.

1. Taiwan Semiconductor Manufacturing

Artificial intelligence (AI) is arguably the biggest recent development in the tech sector. Taiwan Semiconductor Manufacturing, or TSMC for short, is the main third-party manufacturer of semiconductors (chips) worldwide, and it produces an outsized share of the cutting-edge AI processors that are in high demand.

TSMC's share of the global semiconductor market grew from 58% in the second quarter of 2023 to 67% by the end of last year, according to research firm Counterpoint. Second-place foundry services provider Samsung had just 11%.

TSMC makes chips designed by many top tech companies, including Apple, Nvidia, Broadcom, and Advanced Micro Devices. Their partnerships with TSMC are crucial to their operations.

Surging demand for chips made using the most advanced process nodes has been good for TSMC's bottom line. It reported net income of $11.0 billion in the first quarter of 2025, a 60% year-over-year increase. But what makes it attractive as an investment is that shares are still trading at reasonable valuations, especially compared to other AI stocks. As you can see in the chart below, TSMC is currently much cheaper than companies like Broadcom and Nvidia, based on forward P/E ratio.

TSM PE Ratio (Forward) data by YCharts.

2. Alphabet

Alphabet is best known for owning Google, which captures about 90% of the online search market. That's just one of its many widely used products and services, however. Others include Google Maps and Waze, the Pixel line of smartphones, Android (the top mobile operating system by market share), and Chrome (the most-used browser).

The most exciting part for growth-focused investors is Alphabet's developments in AI. The company's AI assistant, Google Gemini, is getting positive feedback from users and is currently third in market share. It's still far behind OpenAI's ChatGPT, but given how successful Alphabet has been in dominating other markets, I expect it to capture a much larger slice of the AI space.

Alphabet also launched Veo 3, an AI video generator, last month. Videos created using the tool quickly went viral for their realism. People understandably have mixed feelings about this type of AI-generated content. But the use of AI tools is growing, and Veo 3 is one of the best options available for creating video content.

Like TSMC, Alphabet stock is affordable right now. It currently has a forward P/E ratio of just 18.20. That's in part due to some serious headwinds Alphabet is facing.

The tech company recently lost an antitrust lawsuit, and while the judge hasn't decided on what penalties it will face, the U.S. Department of Justice is asking for him to mandate that it sell the Chrome browser business, among other things. Google has also been offering voluntary buyouts to employees in its search and advertising units, sparking fears that more layoffs will be next.

Alphabet has challenges to navigate in the near future, but it has also done a great job of innovating and expanding its product offerings with strategic acquisitions. Over the long haul, it should continue to be a big player in the tech world.

3. IonQ

IonQ is a quantum computing company -- specifically, it is developing trapped ion quantum computers. Classical computers store and process data in bits. They’re strictly binary -- a bit's value can be either zero or one. Quantum computers process and store data differently, using qubits, which can have one and zero values, but can also have values that are probability amplitudes -- complex weighted combinations of those zero and one states.

For the non-experts in quantum physics, the technical aspects of how and why this works are largely unimportant. What is important is that using qubits allows quantum computers to rapidly derive answers to some unusual and extremely complex types of problems that would take years or even centuries for a classical supercomputer.

The downside is that qubits are incredibly delicate and finicky. Any outside interference can flip their states, causing the quantum computer to produce incorrect results. Addressing that problem in a way that works cost-effectively, reliably, and at scale is one of the core challenges in the quantum computing world.

IonQ is making progress in this regard. It achieved the first trapped ion quantum system to surpass 99.9% gate fidelity on Sept. 12, 2024. Gate fidelity essentially measures the accuracy rates of quantum computers as they manipulate qubits -- and that milestone was a significant advance for IonQ. In response, investors bid the stock up by 466% from that date through the end of the year.

Unlike the previous two companies on this list, IonQ is a risky and volatile investment. The hope is that it will be able to deliver practical quantum computers that can start solving real-world problems in 2030, and that their use will increase rapidly from there. However, there's also a possibility that IonQ will progress far slower than that toward its goals. Or, another company may develop a better quantum computing solution. There are many rivals in the space, including some tech giants with deep pockets.

Despite the risks, IonQ is worth a look given its growth potential and the progress it has made. If you have $5,000 to invest now, you could put $500 to $1,000 into IonQ as a moonshot, and then divide the rest up evenly between TSMC and Alphabet for a solid mix of tech companies.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.