It may not be a stretch to call artificial intelligence (AI) this generation's most significant growth opportunity. Just think briefly about how much the world has changed since ChatGPT became a thing, and that was just at the end of 2022.
Research by Market Research Future estimates that the global AI industry was worth approximately $106 billion last year, but will grow by over 30% annually to over $2 trillion by 2035.
Some of the top AI stocks have already produced massive returns over the past couple of years, but can still be tremendous winners over the next decade. Here are three examples, and why they are poised to reward long-term investors.
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1. Nvidia: The AI chip landscape could evolve
Nvidia(NASDAQ: NVDA) has been arguably the biggest beneficiary of the initial artificial intelligence investment cycle. Its GPU accelerator chips have become the de facto choice for companies building data centers to train and operate AI models. The good news is that data center spending remains robust.
However, chip demand may eventually shift from cloud data centers to more nuanced AI applications. CEO Jensen Huang recently spoke on several new products, including a desktop-sized AI supercomputer, specialized servers for agentic AI, and software to help develop humanoid robotics. Overall, Huang believes AI is an infrastructure opportunity worth trillions of dollars.
In other words, AI could create opportunities that aren't even evident yet today. Nvidia's foresight helped it race to market dominance in AI accelerator chips, so it's hard to find a better company to invest in that's helping lay the foundation for AI and the new technologies it helps create over the coming decade.
2. Palantir: AI application software is just getting started
Palantir Technologies(NASDAQ: PLTR) is probably the market's hottest AI stock. I've even warned investors about the stock's inflated valuation, so it's not for everyone. But if you're looking a decade ahead, you may not find a company with more exciting growth opportunities. Palantir develops custom software applications on its proprietary platforms. Its growth has accelerated since the company launched its AI-focused AIP platform two years ago.
The company is growing profitably, too, with a whopping Rule of 40 score (revenue growth rate plus profit margin) of 83 in Q1 2025. Palantir's software is highly flexible; it can help guide military missions, optimize supply chains, and manage scheduling for a large hospital. The company started in government, which still accounts for over half its business today, though the private sector will likely drive the bus over the next decade.
Palantir currently has just 622 commercial customers. With approximately 20,000 large corporations operating in the United States alone, customer acquisition could sustain high growth for the foreseeable future. As I said above, investors must tread carefully because Palantir is expensive. Still, this is a long-term winner, and investors can nibble and buy opportunistically if the price decreases.
3. Arm: A catch-all chip stock dominating the industry
Arm Holdings(NASDAQ: ARM) probably has the clearest growth prospects on this list. The company designs and licenses semiconductor chip architecture, including chips used in data centers, smartphones, vehicles, etc. Approximately 47% of the world's chips use Arm-based designs, up from 43% in 2022, so Arm is expanding its market share.
In the next decade, growth in new markets like AI, smart manufacturing, and robotics will lift the global semiconductor market. Research from Roots Analysis estimates the world's semiconductor market was worth $623 billion last year, and will grow to over $1 trillion by 2035. Arm Holdings will benefit, and the company's expanding market share suggests it's winning in the high-growth areas.
Arm Holdings stock is expensive, but that's fair given its industry leadership and jaw-dropping 97% gross profit margin. Analysts believe the company will grow earnings by an average of 28% annually over the long term. This is another stock where investors should buy more when it dips, and let the company grow into its current share price and beyond over the long term.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.
