With the stock market whipsawing amid to on-again, off-again tariffs, now is a great time scoop up some great stocks at discounted prices. Let's look at four monster stocks across industries that investors can buy and hold for the long haul. While in totally different businesses, all four should be artificial intelligence (AI) beneficiaries.
Nvidia (technology)
Nvidia's (NASDAQ: NVDA) graphics processing units (GPUs) have become the backbone of AI infrastructure due to their superior processing capabilities that are ideal for running AI workloads.
Meanwhile, the company's CUDA software platform has created a wide moat for the company in the GPU space due to how easily it allows developers to program its chips for various AI tasks. This has led the company to take an over 80% market share and grow its revenue by an astonishing 380% over the past two years.
With AI data center capital expenditures (capex) still increasing, Nvidia is uniquely positioned to continue to capture a large percentage of this spending. Cloud computing companies are leading the way, with the three largest in the space set to spend around $250 billion this year.
Meanwhile, companies developing AI models and enterprises are also spending big. For its part, Nvidia sees AI data center capex reaching $1 trillion by 2028. This type of projected spending makes Nvidia's stock a long-term winner.
Image source: Getty Images.
Amazon (consumer goods)
The market-share leader in cloud computing with Amazon Web Service (AWS), Amazon(NASDAQ: AMZN) is leading the way on AI infrastructure capex, with plans to spend $100 billion this year. It also says that there are currently more than 1,000 generative AI applications being built across the company.
Amazon sees AI as a once-in-a-generation opportunity and as such will continue to invest big. If history is any indication, this is a smart move as the company's previous big bets, such as its logistics and warehouse network and AWS, proved to be the right moves.
At the same time, Amazon is still the world's largest e-commerce player, where it is also employing AI to improve the customer experience while at the same time creating efficiencies and reducing costs. This includes using AI to optimize routes for its drivers to speed up delivery times and using AI robots in its warehouses that can spot damaged items, so customers don't have the hassle of having to return them.
The combination of its AWS and e-commerce businesses position Amazon to be a long-term winner.
Energy Transfer (energy)
AI data centers consume a lot of power, which is driving up demand for natural gas. One of the companies best positioned to take advantage of this is Energy Transfer(NYSE: ET), which owns the largest integrated midstream system in the U.S.
The company is particularly well situated in the Permian Basin, which is the most prolific oil basin in the U.S. with some of the best drilling economics.
However, it is Energy Transfer's access to the cheap associated natural gas from this basin and vast pipeline network that give it an advantage.
A friendlier government stance toward fossil fuels and growing natural gas demand is leading to more growth projects for the company. As such, it has increased its growth capex budget this year to $5 billion from just $3 billion in 2024. It also signed its first contract to directly supply natural gas to a data center when it entered into a long-term agreement with data center developer Cloudburst to deliver natural gas to its flagship data center development in central Texas.
With some of the best assets in the midstream space and one of the cheapest valuations, Energy Transfer's stock is a solid investment opportunity. It also carries a nice 7.8% forward yield to boot.
PayPal (financials)
It's no secret that payments company PayPal(NASDAQ: PYPL) has had issues in the past. While the company was growing revenue, much of this was coming from low-margin sources, causing it to see margin pressure. Between 2015 and 2023, its gross margin contracted from 51% to 39.6%.
However, new CEO Alex Chriss set out to change this course, focusing on innovation, value-added services, and employing a price-to-value strategy (determining the highest price its customers are willing to pay for something). While this is leading to revenue growth initially decelerating, the company has started to boost its transaction margin dollars, which are similar to gross profits.
At the same time, PayPal introduced a number of new services, such as smart receipts and advanced offer platforms. Both of these are marketing tools that use AI to create personalized offers to customers. It's also begun to better monetize its popular peer-to-peer payment platform Venmo through the introduction of a Venmo debit card and Pay with Venmo feature.
The company's biggest innovation, though, is an AI solution called Fastlane that lets consumers check out with a single tap without having to provide credit card information or set up an account with individual retailers. This solution is a huge help to merchants that has been improving their customer conversions. The company has also said three-quarters of early Fastlane users have been new or dormant PayPal customers.
A cheap stock (less than 12 times forward P/E) that is showing signs of a turnaround, PayPal is a great option to buy now.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Energy Transfer and PayPal. The Motley Fool has positions in and recommends Amazon, Nvidia, and PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.
