2 AI Stocks to Buy in December and Hold for 20 Years

Artificial intelligence (AI) has emerged as a driving force in the stock market, with chipmakers and cloud computing companies leading the way. As software companies start to see growth opportunities, the semiconductor sector remains one of the best places to find attractively valued stocks tied to AI. Let's explore two semiconductor stocks that should see AI help power their growth in December and beyond.

1. Nvidia

Nvidia (NASDAQ: NVDA) has grown to become the second-largest company in the world, thanks to its graphics processing units (GPUs) and CUDA software platform. Originally developed for video games, Nvidia's GPUs have expanded into other industries, such as cryptocurrency mining, AI training, and AI inference. With a 90% market share in AI infrastructure, Nvidia is well-positioned to benefit from the AI infrastructure buildout.

Nvidia's CEO, Jensen Huang, has led the company since 1993, fostering a culture of innovation and continuous improvement. This has resulted in NVIDIA's dominance in GPUs and its leadership in AI infrastructure. The company's strong intellectual property and strategic partnerships, such as those with Microsoft, Google, and Baidu, further solidify its competitive advantage.

Nvidia's forward P/E ratio of 33 and PEG ratio of 1 suggest undervaluation, given its expected growth. The company's strong pricing power and commitment to R&D and capacity expansion make it an attractive long-term investment.



2. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (NYSE: TSM), or TSMC, is the leading player in the contract semiconductor manufacturing space. As the primary manufacturer of Nvidia's GPUs and a close partner with Apple, TSMC is well-positioned to benefit from the growing demand for AI chips and the AI infrastructure buildout.

TSMC's forward P/E ratio of 23 and PEG ratio of 1.2 indicate undervaluation, given its expected growth. The company's strong pricing power, strategic partnerships, and commitment to capacity expansion and technology innovation make it an attractive long-term investment.

In conclusion, Nvidia and TSMC are two AI stocks with strong competitive advantages, innovative technologies, and strategic partnerships. Their attractive valuation metrics, combined with their potential for sustained growth, make them excellent choices for investors looking to buy in December and hold for the next 20 years. As the AI market continues to grow, these companies are well-positioned to capitalize on the increasing demand for AI-powered solutions.