Not many of us remember how the emergence of the Internet changed our lives. It does look like something that happened decades back but it has transformed the way we live. The Artificial Intelligence economy is doing just that. It is going to change the way we live. AI will have a global impact and the market could be worth $15.7 trillion by the end of this decade. This has led the way for investors to choose from multiple AI stocks for retirement.
With the pace at which AI is developing, it can be hard to predict how it will pan out in our lives by the end of 2030. It will have an impact on every industry and will redefine how a business runs. Those who invested in AI in 2020 are already taking home big gains. If you missed the bus, now is not too late to hop on. You can still enjoy a comfortable retirement by investing in AI stocks for retirement.
When you start retirement planning with AI stocks, you should look for companies that have strong growth potential. It is one of the best ways to make money right now. But when it comes to building a retirement portfolio, you also need stability and consistency. This is why it makes sense to pick companies that have a strong balance sheet, the ability to survive changing market conditions, and generate steady returns. With that in mind, let’s take a look at the three stocks to own to retire rich with AI stocks.
Nvidia (NVDA)
2022 wasn’t the best year for Nvidia (NASDAQ:NVDA) but the company has bounced back and how! It is enjoying an outstanding run since the start of 2023 and has risen 175% since the start of Jan. Today, it is trading for $394 and is up over 36% in the last month. This phenomenal rise started after the company reported the first quarter earnings and gave an insight into how Artificial Intelligence has helped the business grow. It is very close to hitting $1 trillion in market cap. The management expects second-quarter revenue to hit $11 billion and looking at Nvidia today, it looks achievable.
When I wrote about buying NVDA stock in March, it was trading at $265 and I was certain that it could hit new highs very soon. If you missed that opportunity, you can still consider the stock for your retirement. With NVDA, you get what you pay for. While this is only the beginning for AI, Nvidia is already a clear winner. Multiple industries use AI and it means that there will be a soaring demand for chips. This is where Nvidia is making the most gains.
With the growing adoption of AI, businesses are looking for chips to run their applications and Nvidia provides these chips. Today, it enjoys the maximum revenue from the data center segment which accounted for about 60% of the total revenue in the first quarter and hit $4.28 billion. The tech giant is dominating the market today and I believe it will continue to shine in the coming years. NVDA stock is the one to hold for retirement. Yes, the stock isn’t cheap and is already trading at a premium but there is a solid possibility of long-term gains for this company.
Microsoft (MSFT)
The list of AI stocks for long-term retirement portfolio is incomplete without Microsoft (NASDAQ:MSFT). This tech giant brings stability, growth, and steady returns to an investor’s portfolio. The company is already seeing its investments in AI pay off. It has enough capabilities to ensure that it remains a strong player in the AI race. MSFT stock is enjoying a strong run since the start of 2023. It is trading at $331 today and is up 38% year to date. Like several other tech stocks, it didn’t have a good 2022 but this year has been an epic run. This is one stock that will continue to generate returns even in an uncertain market.
One reason to own the stock for your retirement portfolio is the diverse business and the multiple markets it serves. A large part of the company’s revenue comes from the data center business. In the recent quarter, its overall revenue was a 7% year-over-year growth. It remains one of the best AI stocks for retirement.
A recovery in the PC segment could drive growth for the business but its cloud computing segment has shown steady growth since 2022. Azure holds a large market share and I believe the company will be able to expand its cloud offerings and continue to grow the business. The company has invested $13 billion in OpenAI and made ChatGPT available to preview through its Azure OpenAI service.
Amazon (AMZN)
The third company on my list is Amazon (NASDAQ:AMZN) . This e-commerce giant has already been using AI across the business and it has helped strengthen its supply chain. It uses AI to predict the products that could be high in demand and also uses AI to offer you a wide range of products that you may be interested in. Just like Microsoft, it also has a cloud computing business which is growing significantly over the years.
Amazon Web Services has been a dynamic growth segment for Amazon and it could continue to make a huge difference over the years. The team’s expertise has enabled a personalized shopping experience for the users, improved the logistics, and also enabled the company to remain at the top, no matter the market condition. AWS generated $21.3 billion in revenue in the recent quarter while the total revenue stood at $127.4 billion. The management expects revenue in the range of $127 billion to $133 billion for the second quarter.
AMZN stock is trading at $126 today and is up 47% year to date. Looking at the company’s history and growth potential, it looks undervalued to me. Amazon has enough data to train the AI system which gives it an edge over other e-commerce companies who are jumping onto the AI bandwagon.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
