These two AI stocks could be core holdings.
For most people, $50,000 is a nice sum of money. In fact, you can buy a pretty nice car with that amount. However, instead of spending it, the best move over the long term would be to invest.
And when it comes to investing, technology stocks are one of the first places long-term investors should look. As technology, like artificial intelligence (AI), continues to transform the world we live in, technology companies have become the biggest stock market winners.
Let’s look at two top tech stocks investors can buy today that are riding the AI wave. One is the leader on the hardware side, while the other is the leader on the software side. While investing $50,000 in these names would be nice, you can, of course, start with any amount.
Nvidia
No company has been a bigger winner from AI than Nvidia (NVDA 0.78%), and there doesn’t appear to be anything on the horizon that will stop its momentum. The company’s graphic processing units (GPUs) have become the backbone of the AI infrastructure buildout, and the company recently called demand for its newest Blackwell chips “insane.”
Nvidia has been able to take a more than 80% market share in the GPU space through its chips’ strong performance, but more importantly through its CUDA software platform. Long before AI was the next big thing, CUDA became the standard platform on which developers learned to program GPUs. This created a wide moat around its booming GPU business.
Meanwhile, AI infrastructure is currently seeing no letup in demand, as major tech companies pile money into the space to develop more sophisticated AI models. As AI models advance, they need more computing power for training, and that power comes from Nvidia’s GPUs. For example, Alphabet has said its new Llama 4 large language model (LLM) would need 10 times the compute power of its predecessor, while xAI’s Grok 3 LLM used 5 times the number of GPUs as Grok 2. The large tech companies investing in AI infrastructure have all indicated that their spending will continue to ramp up, with Oracle saying it sees no end to AI infrastructure spending over the next five to 10 years. This all benefits Nvidia.
Despite the stock’s strong performance, it is still attractively priced, trading a forward price-to-earnings ratio (P/E) of under 35 based on next year’s analyst estimate and a price/earnings-to-growth ratio (PEG) of about 0.9. A PEG under 1 is generally viewed as undervalued, and growth stocks often carry PEGs well above 1.
Image source: Getty Images.
Microsoft
Another company riding the AI wave is Microsoft (MSFT 0.35%), which was one of the first large tech companies to go all-in on the technology when it made a large investment in and formed a partnership with OpenAI.
Thus far, its Azure cloud computing unit has been the company’s biggest AI beneficiary, as organizations turn to its platform to create their own AI solutions. This is a consumption-based business where users are only charged for the resources they use, and so far, usage has been very strong. This can been seen in the company’s results, with Azure growing revenue around 29% to 30% the past few quarters.
Cloud computing isn’t the only area the company is looking at AI to help power growth. Its GitHub Developer platform as been another big AI winner, as customers turned to its AI assistant, Copilot, which can make suggestions as developers type and even complete coding tasks.
However, the next big opportunity for the company could be with its Microsoft 365 Copilot. The company recently introduced a number of improved Copilots for Microsoft 365, which it will use to help lure organizations to its Microsoft 365 Copilot add-on. With these new features, users will be able to do things like work with the programming language Python in Excel through only natural language, pull in data from different types of sources with Word Copilot, and create presentations using only natural language with Copilot for Powerpoint.
At the cost of $30 a month per user for its Microsoft 365 Copilot add-on, this is a huge potential growth opportunity for Microsoft, as its 365 Copilot costs more than many of its subscriptions to Microsoft 365. To purchase the Microsoft Copilot, users are required to have a separate license to a qualifying plan, which can range from as little as $4.75 per user per month for its basic business plan without Teams to $22 per user per month for its premium business subscription with Teams, which also includes cybersecurity and identity management features. Some enterprise plans with more features can cost more.
Microsoft has proven to be an adaptive and innovative company, which has helped it grow to be one of the largest companies in the world. It is these attributes, along with the AI opportunity in front of it, that make it a great long-term investment.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
