Do you want to become richer? 2 Best Stocks to Buy Now and Hold Forever

Recent market volatility has highlighted the importance of investing in stable growth stocks. Companies with reliable businesses and roles in ever-expanding industries can provide considerable stock growth over the long term. And technology is one of the best sectors to find such companies. It is known for its ever-expanding nature and benefits from the constant demand for upgrades to various software and hardware offerings.

The tech rich Nasdaq Composite it has grown about 110% in the last five years and 280% in the last decade. Profitable markets such as consumer technology, digital advertising, cloud computing and AI have driven growth and will likely continue to do so for decades.

The Nasdaq has fallen 10% in the past month on a tech sell-off as disappointing economic reports worried Wall Street. However, past trends suggest that the current winds are only temporary. Technology remains a high-growth industry that has a lot to offer long-term investors.

So you want to get richer? Here are two of the best stocks to buy now and hold forever.

1. Advanced microdevices

Advanced microdevices (AMD -1.50%) is a compelling investment as the second largest name in graphics processing units (GPUs) after the market leader Nvidia. GPUs can run the intensive workloads required to train artificial intelligence (AI) models, making them crucial to industry development.

As a result, a recent AI boom has seen AMD and Nvidia’s GPU sales surge in recent months. Meanwhile, their market capitalizations hit record highs, with Nvidia becoming the first chipmaker to reach a market cap of more than $2 trillion and AMD reaching $215 billion. However, the significant difference in their market caps illustrates AMD’s vast potential as it expands into AI.

Now could be a great opportunity to invest in a company that could be worth at least $1 trillion by the end of the decade. AMD stock would have to rise 374% to reach that. With its share price up 500% over the past five years, that kind of growth isn’t out of the realm of possibility.

Meanwhile, recent earnings show that AMD is making promising progress in AI. The company released its earnings results for the second quarter of 2024 on July 30. Revenue rose 9% year-over-year, beating expectations by $120 million. The increase was driven primarily by higher sales in its AI-focused data center segment, with revenue rising a record 115% year-over-year to nearly $3 billion.

AMD’s customer segment, which includes revenue from central processing unit (CPU) sales, also saw a 49 percent increase in revenue.

Data by YCharts

AMD’s price-to-earnings (P/E) ratio of 38 doesn’t exactly scream “bargain.” However, this figure is well below the company’s average forward P/E over the past year, indicating that it is trading at one of the best values ​​in recent months.

Given its massive potential in AI chips, AMD is a great stock to buy now and hold indefinitely.

2. Microsoft

Microsofthis (MSFT 0.83%) The stock price has fallen 5% in the past month amid the selloff that has affected countless tech stocks. However, the company remains one of the best long-term plays. Home to powerful brands like Windows, Office, Xbox, Azure and LinkedIn, Microsoft has become a technology giant with lucrative positions in multiple markets. The company’s success is mainly due to consistent reinvestment in its businesses and a constant eye on the future.

Microsoft’s success has turned it into a cash cow, with its operating income and free cash flow soaring 288% and 212% over the past decade. In fact, the tech giant hit $74 billion in free cash flow this year, proving it has the funds to continue expanding its business and keep pace with its competitors.

Significant cash reserves have allowed Microsoft to get a head start on the burgeoning AI market, investing $1 billion in ChatGPT developer OpenAI in 2019. That figure has since grown to $13 billion, giving the company access to some of the most advanced AI models available.

The partnership boosted Microsoft’s business as it integrated AI into its productivity software and cloud services. Recent earnings reflect the company’s success in the industry, with revenue growing 16% year-over-year in fiscal 2024 and operating income growing 24%. The most impressive growth came from its cloud platform, Azure, which posted revenue increases of 20% for the year, while operating income rose 31%.

In addition to AI, Microsoft has a strong position in personal computing, gaming and digital advertising. The company’s diverse business model makes it less vulnerable to macroeconomic headwinds than many of its peers, evidenced by steady growth over the past decade and annual revenues that have risen 162% since 2014.

Microsoft’s P/E of 30, along with its expanding cash hoard and strong position in technology, make its stock worth the price for anyone looking to hold long into the future.