Two Tech Stocks Poised for Growth in the Coming Decade
For the last ten years, technology stocks have been at the forefront of market performance. Currently, eight of the S&P 500‘s largest weightings are in technology or related sectors. As technology continues to evolve, these stocks are likely to remain key players in driving market growth over the next decade.
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Nvidia: The AI Powerhouse
Nvidia (NASDAQ: NVDA) has established itself as a leader in artificial intelligence (AI) infrastructure, providing crucial graphic processing units (GPUs) that enable the training of AI models. The company holds an impressive market share of nearly 90% in the rapidly growing GPU sector.
This success stems partly from its CUDA software platform, designed to facilitate programming on its chips beyond gaming graphics. Over the years, Nvidia has further solidified its lead with CUDA X, a suite of GPU-accelerated tools and services tailored for AI applications.
As one of the main beneficiaries of the AI boom, Nvidia is expected to achieve its second consecutive year of triple-digit revenue growth. With AI models becoming more sophisticated, the demand for computing power will only increase, further driving Nvidia’s potential. For instance, Meta Platforms’ recent Llama AI model requires ten times more GPUs than its predecessor. Furthermore, Nvidia’s main customer, Microsoft, disclosed plans to invest $80 billion in AI data centers this year.
Currently, there is no indication that spending on AI infrastructure will slow down, which bodes well for Nvidia. Despite its recent strong stock performance, Nvidia remains attractively priced, with a forward price-to-earnings (P/E) ratio below 31 and a price/earnings-to-growth (PEG) ratio below 1, suggesting the stock may be undervalued.
Image source: Getty Images.
Amazon: Leader in Cloud Computing
Amazon (NASDAQ: AMZN) is best known for its e-commerce platform, yet its most profitable segment is the Amazon Web Services (AWS) cloud computing unit. Over the past year, AWS generated an operating income of $36.4 billion, significantly outperforming Amazon’s other business units, which yielded $24.3 billion.
Founded in 2006, AWS introduced the infrastructure-as-a-service model. Prior to this, Amazon faced challenges with cost and scalability while building e-commerce infrastructure for partners like Target. AWS emerged to alleviate these issues, allowing varied users to access data centers without high construction and maintenance costs. Today, AWS holds a commanding market share of over 30% in the global cloud computing landscape.
As AI continues to grow, cloud computing has become essential for organizations developing their own AI models. Amazon supports this growth with offerings such as Bedrock and SageMaker. Bedrock provides foundational AI models, enabling customization by clients. Through SageMaker, businesses can create and train AI models, transitioning them into production.
Beyond cloud services, Amazon is integrating AI into its e-commerce and logistics operations, enhancing product recommendations and streamlining seller listings. Additionally, AI is improving logistics by optimizing routes and automating warehousing tasks.
Throughout its history, Amazon has demonstrated a consistent commitment to innovation and adaptability. The company has a strong track record of decisive investments, setting the stage for long-term success. Current evaluations indicate that Amazon’s stock, trading at a forward P/E ratio below 30 and a PEG under 1.1, remains reasonably valued.
Investment Considerations for Nvidia
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John Mackey, former CEO of Whole Foods Market, which is owned by Amazon, is on The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is also on the board. Geoffrey Seiler holds no shares in any of the mentioned companies. The Motley Fool holds positions in and recommends Amazon, Meta Platforms, Microsoft, Nvidia, and Target. The Motley Fool recommends various options, including long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. For more details, refer to the Motley Fool disclosure policy.
The views and opinions expressed herein are those of the author and may not necessarily reflect those of Nasdaq, Inc.
