2 AI Stocks With Sky-High Potential to Hold for Decades

Core Viewpoint - The article highlights two "pick-and-shovel" AI stocks, Nvidia and Iren Limited, as attractive investment opportunities amid a massive investment cycle in artificial intelligence, with projected spending on AI infrastructure exceeding $3 trillion in the next three years [1]. Group 1: Nvidia - Nvidia has a dominant position in the GPU market, controlling up to 90% of it, which is crucial for advanced AI training and inferencing workloads [3][4]. - Despite a significant stock increase of 31,000% over the last decade, Nvidia remains a valuable investment as demand for GPUs continues to grow, with OpenAI projecting the need for 100 million GPUs in the future [4][5]. - Nvidia's data center business is experiencing rapid growth, with sales to data centers accounting for 88% of its revenue last quarter and growing 56% year over year [6]. - The company is expected to grow earnings at an annualized rate of 36% in the coming years, with its stock currently trading at 28 times next year's earnings estimate, which is considered a bargain [7]. Group 2: Iren Limited - Iren Limited is transitioning from Bitcoin mining to building high-performance data centers for AI, presenting significant long-term investment potential [9][10]. - The company's revenue more than doubled to $501 million last year, with adjusted EBITDA growing 395% to $270 million, and projections suggest adjusted EBITDA could reach $1.2 billion in the next three years [10]. - Iren has secured 2.9 gigawatts of contracted power for its data centers and has increased its power capacity by approximately 100-fold over the last four years, addressing the anticipated power shortages in the AI market [11][12]. - The stock has surged 240% year to date, indicating strong investor interest and the potential for substantial growth as demand for AI infrastructure increases [13].