If you are looking for AI-related stocks you can buy and hold forever, look no further than this list. The stocks on this list are applying AI, and the application of AI counts. It’s one thing to make a machine that can talk or generate unique images; it is something else to apply AI technology in a meaningful way that builds value and generates cash flow. The takeaway is that AI is in its earliest phases and will impact every aspect of our lives. These companies are leading in critical areas and making profits for investors today. Ranked from smallest to largest, they are Symbotic Inc. (NASDAQ: SYM), Intuitive Surgical (NASDAQ: ISRG), and Microsoft (NASDAQ: MSFT).
Symbotic AI-Powered Warehouses Are the Future of Supply Chains
Symbotic AI-powered warehouses offer numerous advantages for supply chains, including increased capacity and fulfillment speeds, both accretive to the bottom line. Businesses using the technology today include C&S Wholesale Grocers, Target, and Walmart, among others, and the backlog is growing. Its AI offerings span the AI universe from software solutions for operating warehouses and improving efficiency to computer vision to allow autonomous operations.
Among the opportunities for Symbotic is Greenbox. Greenbox is a joint venture with SoftBank Group that provides warehouse-as-a-service. The company will deliver Symbotic AI-powered automation equipment on a rental basis, opening access to a broader clientele.
The latest quarterly results included sustained, high double-digit growth near 60%, outperformance, and solid guidance, although weaker than expected. The shortfall in guidance caused share prices to implode and opened up a significant opportunity for investors. Analysts trimmed their targets following the guidance, but the buy rating remained firm, and new targets suggest a 10% to 20% upside over the next few quarters.
Intuitive Surgical is an Intuitive Choice for Investors
Intuitive Surgical has used AI for years and is advancing surgical practices with it. The company’s growth is driven by the expanding use of its da Vinci surgical robot systems, which are compounded by procedure volume growth at established locations. Details from 2024 results include industry-leading growth, robust cash flow, and a 10% increase in shareholder equity. The company doesn’t pay dividends or buy back significant stock but reinvests in other ways, building value through innovation and technological advancements.
ISRG stock price has trended higher for decades and is on track to hit the $500 level soon. That is significant for investors because it could lead to a stock split. Stock splits have little to no impact on the company’s fundamentals. Still, they are a sign to the broader market that this is a good company while easing access to a more comprehensive range of investors, including company employees. The takeaway is that stocks that split tend to outperform the S&P 500 by 2:1, and this AI-powered stock has secular tailwinds stemming from the growing population.
Microsoft is #2 in the AI Industry
Microsoft is the #2 player in AI today. This platform company has whatever you need for AI, whether you are an average person looking to play around with generative tools or a developer looking to build and train a model. Their offerings allow businesses and organizations to do AI independently, or they can do it for you. The full-stack offerings also resonate because of choice; Microsoft offers NVIDIA (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD)-powered GPU clusters, and its cloud services are integrated with critical infrastructure like Oracle’s database technology.
The Q4 results failed to spark a rally because the strengths were expected. The takeaway from the results is that growth is solid at 15%, underpinned by 30% growth in the cloud, with most other sub-segments growing. The guidance is for more of the same, including robust cash flows and capital return. The capital return includes dividends and share repurchases, offsetting the dilutive impact of share-based compensation. The Q4 results led analysts to revise their targets, narrowing the range and showing an increasing conviction that this stock price will increase to $500.
