2 “Magnificent Seven” Stocks to Buy and Hold for the Rest of the Decade
If I were going to buy two “Magnificent Seven” stocks and hold them for the rest of the decade, my choice would be easy. I’m buying Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN). The two companies actually have a lot in common, as they are two of the world’s largest cloud computing providers. Over the next several years, I think these are the type of AI stocks to own.
The pick-and-shovel providers of AI infrastructure, like Nvidia, have clearly dominated the early phase of AI. Right now, there is a rush to build out AI data centers, which has driven huge demand for chips, networking, and other components. However, as the market starts to mature, the large cloud providers, such as Alphabet and Amazon, will be the best positioned.
The reason is simple: The big cloud computing stocks can win in both a high-spending environment and a slow-spending one. Right now, both Amazon and Alphabet are getting strong returns on their AI infrastructure spending. Amazon has said it is signing five-year or longer contracts and getting a payback within two to three years, with chips having about a six-year useful life.
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