The Motley Fool·2025-03-11 07:45Core Viewpoint - The growing adoption of artificial intelligence (AI) presents a significant long-term investment opportunity, with an estimated potential to add $6.6 trillion to the global economy by 2030 according to PwC Group 1: Nvidia - Nvidia continues to dominate the market for chips necessary for training AI models, with revenue doubling to $130 billion last year, driving its share price to record highs [2][5] - The company has successfully transitioned from primarily selling GPUs for PC graphics applications to focusing on data centers, which is currently a hot market [3][4] - Nvidia's automotive segment is also experiencing rapid growth, with revenue increasing by 55% to $1.7 billion last year, indicating a multibillion-dollar opportunity [4] - The company is investing in expanding its addressable market through software, services, and new chip types, with a forward price-to-earnings (P/E) multiple of 24 and projected earnings growth at a compound annual rate of 34% [5] Group 2: Alphabet (Google) - Alphabet owns valuable online properties and has over 2 billion users across its products, leading to a revenue growth of 14% to $350 billion last year, primarily from advertising [6][7] - The company has been leveraging AI to enhance its products, resulting in increased user engagement and advertising growth, with ad revenue growing 11% to $264 billion [7] - Improvements to the Gemini AI model present opportunities for subscription services like Google One, which already has over 100 million subscribers [8] - Google Cloud is one of the fastest-growing enterprise cloud services, with revenue growing 30% year-over-year in the fourth quarter, driven by demand for generative AI solutions [9] - Alphabet's stock is currently priced at 19 times this year's earnings estimate, with analysts expecting an annualized earnings growth rate of 17% in the coming years [10]