Tech stocks have driven the market over the past decade, with eight of the tech stocks S&P500‘s largest weightings are now in technology or technology-adjacent stocks. As technology continues to evolve and advance the world we live in, there is good reason to believe that technology stocks will continue to contribute to market upside over the next decade.
Let’s look at two tech-related stocks that seem like obvious buys.
Nvidia
Nvidia (NVDA 3.10%) became the leader in artificial intelligence (AI) infrastructure where it graphics processing units (GPUs) provide the computation needed to train AI models and run inference. It has an astonishing market share of almost 90% in the rapidly growing GPU space.
This dominance can be attributed to its CUDA software platform, which was created long ago to allow developers to program its chips outside of their original purpose of speeding up graphics rendering in video games. As a result, CUDA became the de facto software on which developers learned to program GPUs, while in the years since the program’s creation it has cemented its lead through CUDA X, a collection of microservices, d GPU-accelerated tools and libraries for AI built on CUDA.
The company has been one of AI’s biggest winners and is on track for its second consecutive year of triple-digit revenue growth. However, with AI still in its early stages, Nvidia should still have plenty of growth ahead. As AI models advance, they need exponentially greater computing power and chips like GPUs to be trained.
For example, the latest iteration of MetaplatformsThe Llama AI model uses 10x more GPU to train than the previous iteration. Meanwhile, Nvidia’s biggest customer, Microsoftjust announced that it will spend a staggering $80 billion this year to build AI data centers.
Currently, there are no signs of AI infrastructure spending slowing down, which is a good thing for Nvidia. At the same time, despite the stock’s strong performance over the past few years, it remains reasonably priced and currently trades at a premium forward price/earnings (P/E) ratio lower than 31 times and a price/earnings/growth ratio ( ANKLE ) less than 1, which generally indicates that a security is undervalued.
Between its valuation and long period of growth, Nvidia continues to look like a solid buy.
Image source: Getty Images.
Amazon
Amazon (AMZN 2.39%) is known for its e-commerce platform, but its biggest business in terms of profitability is actually its Amazon Web Services (AWS) cloud computing unit. Over the past 12 months, AWS generated $36.4 billion in operating profit, compared to $24.3 billion for the rest of Amazon’s business.
Amazon was the first company to launch the infrastructure-as-a-service model in 2006. In the run-up to AWS, the company began helping develop e-commerce infrastructure for various partners and affiliates, including major retailers like Target.
However, it faced cost and scalability issues. AWS emerged as a way to solve these problems and allow users of all sizes to access data centers without the high costs of building and maintaining them. Today, AWS is the largest cloud computing company in the world with a market share of over 30%.
Cloud computing has been one of the biggest beneficiaries of AI, as organizations turn to the cloud to create their own AI models and applications. Amazon, for its part, helps businesses achieve this through its Bedrock and SageMaker solutions. Bedrock offers its clients a number of fundamental AI models, its own as well as models from other well-known companies, such as Anthropic, Cohere, Meta Platforms and Mistral.
Customers can use these as a starting point and customize them. They can also use SageMaker to create and train their own AI models and applications, and put them into production. Amazon has also developed its own custom AI chips, designed specifically for AI training and inference.
Outside of the cloud, Amazon is also using AI to improve its e-commerce and logistics operations. This includes using AI to make better product recommendations to customers and providing useful insights from AI-generated reviews. On the seller side, it uses AI to make listing creation easier. For logistics and warehousing, Amazon deploys AI to plan better routes and train robots to find and handle items faster.
Throughout its history, Amazon has proven itself to be both innovative and adaptable. It’s not afraid to invest heavily to win, which it does with both its cloud computing and e-commerce businesses. This is a recipe for long-term success. All things considered, the stock is reasonably valued, trading at a forward P/E multiple of less than 30 and a PEG ratio of less than 1.1.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Amazon, Meta Platforms, Microsoft, Nvidia, and Target. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Mad Motley has a disclosure policy.