2 Tech Stocks to Buy and Hold for the Next Decade

In the ever-evolving landscape of technology, identifying stocks that can deliver sustained growth over the next decade is a challenge. However, two companies stand out as prime candidates for long-term investment: Nvidia and ASML. These tech giants are not only leaders in their respective fields but are also poised to benefit from the burgeoning demand for artificial intelligence (AI) and advanced semiconductor technology.

Nvidia: The AI Powerhouse

Nvidia has become synonymous with the AI revolution. The company's graphics processing units (GPUs) are the backbone of AI model training and inference, making them indispensable in the rapidly growing AI infrastructure market. According to Nvidia, AI-related data center capital expenditure (capex) is expected to top $1 trillion by 2028, more than double the current spending. This positions Nvidia as a major beneficiary of this growth.

The company's forward price-to-earnings (P/E) ratio of 26 and a price/earnings-to-growth (PEG) ratio below 0.5 indicate that Nvidia's stock is attractively priced. PEG ratios under 1 are generally considered undervalued, suggesting that Nvidia's stock price is relatively low compared to its expected growth rate. This makes it an attractive investment for long-term investors looking for growth potential.



ASML: The Chip Manufacturing Monopoly

ASML, on the other hand, has a virtual monopoly on the equipment used to make advanced chips, particularly through its extreme ultraviolet (EUV) lithography technology. This technology is essential for manufacturing chips with smaller features and higher density, making it a critical component in the semiconductor value chain.

ASML's forward P/E ratio of 29.5 may not seem like a bargain at first glance. However, this ratio drops to a P/E of 24 based on 2026 estimates given the current outlook for new fab spending. This indicates that ASML's stock price is expected to grow in line with its earnings, making it a solid buy at current levels. The company's leadership in EUV lithography technology and its introduction of high-NA EUV technology further support its potential for future growth.

Growth Prospects and Market Leadership

Both Nvidia and ASML are at the forefront of their respective fields, with Nvidia leading in AI hardware and software, and ASML dominating the chip manufacturing equipment market. Their market leadership, innovation, and growth prospects make them stand out as top tech stocks to buy and hold for the next decade.

Nvidia's focus on AI positions it uniquely to benefit from the growing demand for AI infrastructure. The company's GPUs are the main source of computing power behind AI, and with AI infrastructure spending continuing to grow, Nvidia is poised to continue benefiting from this trend.

ASML's high-NA EUV machines, though expensive, are already being sold to leading foundries like Taiwan Semiconductor Manufacturing (TSMC) and Intel. The increasing demand for advanced chips from these companies further supports ASML's growth prospects.

Comparison to Other Leading Tech Companies

While other tech companies may have strong market positions, Nvidia and ASML's focus on AI and advanced chip manufacturing positions them uniquely to benefit from the growing demand for AI infrastructure and advanced semiconductors. Their market leadership, innovation, and growth prospects make them stand out as top tech stocks to buy and hold for the next decade.

Taiwan Semiconductor Manufacturing (TSMC), for example, is the leading semiconductor contract manufacturer and a customer of ASML. TSMC's importance in the semiconductor value chain gives it strong pricing power and profitability growth. However, TSMC's forward P/E of 19.5 and PEG below 0.7 indicate that it is also attractively priced but may not have the same growth potential as Nvidia and ASML in the AI and chip manufacturing sectors.

Conclusion

In conclusion, Nvidia and ASML stand out as top tech stocks to buy and hold for the next decade due to their market leadership, innovation, and growth prospects. Their forward P/E ratios and PEG ratios suggest that both companies are attractively priced given their potential for future growth. Long-term investors should consider these metrics when evaluating the valuation and growth potential of these tech stocks.