The market might be hovering around record highs, but it’s turning into one where picking individual stocks matters more than ever. Investors who carefully choose specific high-performing stocks could find themselves ahead of the game.

Here, let’s examine three standout artificial intelligence (AI) stocks worth buying and holding for the next few years.

broadcom

broadcom (AVGO) is positioned for impressive growth over the next three years. The ongoing boom in data center construction is driving up demand for network equipment, and the potential increases even more with application-specific integrated circuits (ASICs).

Broadcom is expected to benefit significantly from Alphabet’s (Google) push into AI, particularly with the surge in spending on AI infrastructure. They’re helping Google manufacture tensor processing units (TPUs) crucial for its AI workloads. Alphabet is now offering these TPUs to customers via Google Cloud, and there’s already a hefty $21 billion order from Anthropic.

Other major companies are also turning to Broadcom to create their custom chips, which opens up valuable growth strategies moving forward.

alphabet

Alphabet is rapidly becoming a top player in the AI field. Thanks to new AI features, Google Search has seen a boost in its core revenue, and the Gemini AI model has received great acclaim. Additionally, the cloud computing segment is thriving, with revenues jumping 48% in the last quarter.

The firm plans to put considerable investment into AI infrastructure this year, pivoting to capitalize on available opportunities. This tactic seems sound, especially since their TPUs offer a considerable cost advantage compared to competitors, costing less than half of a typical Nvidia graphics processing unit (GPU).

Allowing customers to utilize these chips on Google Cloud could drive even more revenue. Estimates from Morgan Stanley suggest Alphabet makes $13 billion for every 500,000 TPUs deployed. Given that they have a comprehensive AI stack, from proprietary chips to advanced AI models, Alphabet appears to be a wise investment for the long haul.

micron technology

One of the biggest challenges facing AI infrastructure today is memory. AI chips require high-bandwidth memory (HBM) for optimal performance, but producing HBM is complicated and demands significantly more wafer capacity than standard dynamic random access memory (DRAM). This intricate process has resulted in supply shortages across the DRAM market, causing prices to soar.

As one of the top three DRAM manufacturers along with SK Hynix and Samsung, micron technology (MU) stands out as an optimal choice. The current landscape has led to sharp rises in sales and profit margins.

As demand continues to grow, the tight supply-demand dynamics in DRAM are likely to persist for many years, even as Micron scales up its capacity. This environment plays perfectly into the company’s strengths.