Finding tech stocks that are worth holding on to forever isn’t an easy task. While some companies look like they will have great long-term results, they may be exposed to some trends that cause their business to decline over the long term. However, I’ve got three stocks that look unstoppable and are worth buying now and holding forever.
My three picks for this realm are Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL), Microsoft(NASDAQ: MSFT), and Taiwan Semiconductor(NYSE: TSM). I own all three of these stocks and have no intention of selling them.
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There was a point last year when some had written Alphabet off as a victim of generative artificial intelligence (AI). The technology was supposed to replace Google Search, but that hasn’t been the case. Instead, Alphabet has evolved Google Search to integrate generative AI, and the result has been incredibly popular among users.
Additionally, Alphabet has emerged as a leader in generative AI and has announced several impressive breakthroughs, including TurboQuant, which reduces the amount of memory necessary for a generative AI to continue its work. Alphabet is truly a tech leader and isn’t going anywhere due to its massive resources and focus on AI.
Microsoft is another stalwart in the AI industry. Its products have been the backbone of business operations for years, and with its integration of AI into many of those products, it’s stepping into the new era alongside everyone else. Microsoft is also a major supplier of AI computing resources, and many generative AI companies have turned to Microsoft Azure to host their AI models.
After the AI build-out is complete, Azure will continuously generate revenue thanks to rental contracts. This recurring revenue model will allow Microsoft to benefit from AI perpetually, solidifying the company’s future.
As another bonus, I think Microsoft is the best buy right now among the three. The stock is reaching some of the cheapest levels it has traded at over the past decade, and there really isn’t a good reason for the stock to be selling off this much.
Lastly, there is Taiwan Semiconductor. This may seem like an odd addition because Taiwan Semiconductor has historically been seen as a cyclical business. While I don’t think it has completely overcome this issue, I think that the world’s economy has such a high demand for semiconductors that the depths of the cycle won’t be as great as they previously were.
Taiwan Semiconductor’s focus has rightfully been on AI chips over the past few years and will remain there for some time. However, there are other technologies on the horizon, like quantum computing, autonomous driving, and humanoid robots, that could have similar levels of chip demand that pushed Taiwan Semiconductor’s stock higher.
The bull thesis behind Taiwan Semiconductor’s stock is simple: We are going to use a greater quantity of chips, and we will need more advanced chips to meet product demand in the future. That seems like a pretty easy bet to make, and with Taiwan Semiconductor being the leading foundry in the world, I’m confident buying the stock and holding on to it.
As a bonus, Taiwan Semiconductor likely has the most upside over the next five years thanks to its exposure to the AI industry. With Taiwan Semiconductor trading at a 10% discount to its all-time high, now is a perfect time to scoop up shares.
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Keithen Drury has positions in Alphabet, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
