Although the market had a strong week, plenty of stocks still look like phenomenal buys. I'm focusing on three right now: Nvidia (NASDAQ: NVDA), Taiwan Semiconductor (NYSE: TSM), and Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL).
Although each of these stocks may have rallied over the past week, their gains will be nothing compared to the long-term stock performance that's in store for this trio.
Image source: Getty Images.
1. Nvidia
Nvidia makes graphics processing units (GPUs), which are widely deployed in applications that require significant computing power, such as artificial intelligence (AI) model training. Nvidia's market share in the data center GPU market is astonishing, with most estimates pegging Nvidia's market share above 90%.
Additionally, over the past 12 months, Nvidia has generated $115 billion in sales from its data center division. Considering that Nvidia's overall revenue over the past 12 months was $130.5 billion, Nvidia's performance is heavily tied to data center buildouts.
While some investors are worried that data center buildouts may slow, all big tech companies have committed to record-setting capital expenditures in 2025, most of which will be deployed in data center builds.
A third-party estimate Nvidia cited stated that data center buildouts totaled $400 billion in 2024. However, that figure is expected to rise to $1 trillion by 2028. That's incredible growth, and if it turns out to be true, there's still massive upside for Nvidia's stock if it maintains its market share dominance.
This is still the early innings of AI deployment and workload migration to the cloud. As a result, there's still a ton of data center capacity to build, which is excellent news for Nvidia. With that in mind, Nvidia is a stock that I want to buy and hold for years to come.
2. Taiwan Semiconductor
Taiwan Semiconductor (or TSMC) makes chips for Nvidia and nearly every other big tech company. These clients can't manufacture their own semiconductors, so they farm out that work to foundries like TSMC. Nobody has the long-term history of continuous innovation and execution like this company, so it has cemented its place as a valuable partner for these companies for the foreseeable future.
Management is incredibly bullish on the future. They expect AI-related revenue to grow at a 45% compound annual growth rate (CAGR) over the next five years, with overall company revenue increasing at nearly a 20% CAGR. Many companies place chip orders years in advance, so when TSMC's management speaks about future growth, investors would be wise to listen.
However, one glaring issue with TSMC is that most of its fabrication facilities are outside U.S. borders, making it a potential target for Trump administration tariffs. While this is a valid concern, investors must be aware of other issues.
First, semiconductors are currently exempt from reciprocal tariffs. Second, TSMC management unveiled plans to invest $100 billion in chip production facilities in the U.S. This may be key to staying out of the crosshairs of a tariff, as President Donald Trump's ultimate goal is to increase domestic chip production capacity.
The growth that TSMC is expected to put up is undeniable, and with the ball rolling toward getting more U.S. capacity up and running, tariffs aren't as much of a concern.
3. Alphabet
Last is Alphabet, which is trading for an absurdly low price tag. At just 17 times forward earnings, Alphabet's stock is among the cheaper stocks in the market.
There are multiple reasons for Alphabet's cheap price tag. First, Alphabet's primary business is advertising, which tends to be negatively affected when the economic outlook is uncertain or negative. Second, investors are worried that Alphabet's primary cash cow, the Google search engine, could be replaced by generative AI models. Last, Alphabet has been found guilty of operating an illegal monopoly in its search engine and advertising platform businesses.
That's not a great setup for Alphabet's stock, and the market is assuming the worst-case scenario outcome for all three of these problems. I think that's the wrong way to view the stock, as advertising revenue always comes back following a downturn.
Alphabet is already integrating AI summaries into its Google search results, and the court case could take years to wrap up. When all these factors are considered, I think the pessimism is excessive, and investors are ignoring a great business that's still growing at a double-digit pace.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
