5 ‘Strong Buy’ Stocks That Could Dominate the AI Economy in the Next 10 Years

Microsoft - In fiscal 2025, Microsoft reported a revenue increase of 15% year over year, reaching $281 billion, primarily driven by high demand for cloud and AI services [1] - Microsoft has over 400 new data centers across 70 geographies and significant investments in GPU and CPU servers, indicating its ambition to lead in AI [1] - The company has a backlog of $368 billion and anticipates double-digit growth through fiscal 2026 and beyond, positioning itself for long-term dominance [1][2] Nvidia - Nvidia's stock is rated as a "Strong Buy" by Wall Street, with 40 out of 47 analysts recommending it, and an average target price of $217.14, suggesting a potential upside of 13% [3] - In fiscal 2026 second quarter, Nvidia achieved $46.7 billion in revenue, with data center sales increasing by 56% year over year, highlighting its dominance in AI computing [4] - Nvidia has developed a robust AI ecosystem with platforms like CUDA and Nvidia AI Enterprise, which are widely used by developers globally [4][5] Alphabet - Alphabet, valued at $2.98 trillion, saw its revenue rise by 14% year over year to $96.4 billion, driven by strong performance in Google Services and Cloud [7] - The company's net income increased by 19% to $28.2 billion, showcasing the integration of AI into its growth strategy [7] - Google Cloud generated $13.6 billion in revenue, up 32% year over year, with operating margins nearly doubling to 20.7% [9] Taiwan Semiconductor Manufacturing Company (TSMC) - TSMC, valued at $1.6 trillion, reported a 44.4% year-over-year revenue increase to $30.1 billion in the second quarter, with earnings per share rising by 60.7% [12] - The company is a leading foundry producing advanced semiconductors for major tech firms driving the AI boom, including Nvidia and Apple [12] - TSMC's $165 billion investment in advanced fabs ensures long-term supply stability for global tech leaders [12] Broadcom - Broadcom, valued at $1.6 trillion, reported a 63% year-over-year increase in AI chip revenue, reaching $5.2 billion in the third quarter of fiscal 2025 [15] - The company's XPU division accounts for 65% of its AI revenue, with a recent $10 billion AI rack order indicating strong demand [16] - Broadcom's robust margins, consistent dividends, and long-term contracts position it well for future growth in the AI economy [16]