As we approach the halfway point in the year, investors must look at their portfolios and see if they’ve got some cash to deploy. While having a cash stockpile ready to use at a moment’s notice is a great safety net, too much cash can inhibit long-term returns. Furthermore, it’s nearly impossible to tell what the market will do following a huge news headline — for example, the market has had a strong week despite the events in Iran last weekend.
Investors with some cash to deploy should consider buying some shares, and I’ve got five stocks that look like excellent long-term picks.
Image source: Getty Images.
AI hardware plays
Artificial intelligence (AI) is still a huge theme in the market, and that won’t subside until AI computing capacity is completely built out. We’re nowhere near the scale that must be deployed to run the economy in an AI-first manner, which benefits many of the AI hardware companies.
In this space, my top picks are Nvidia (NVDA 1.74%), Broadcom (AVGO -0.30%), and Taiwan Semiconductor Manufacturing (TSM 2.02%). Nvidia has been a long-term winner since the AI arms race kicked off in 2023. Its graphics processing units (GPUs) are best-in-class, and are the computing muscle behind almost all of the AI models used today.
Despite its massive size, Nvidia is delivering rapid growth, with revenue rising 69% in the first quarter of fiscal year 2026 (ended April 28) and also projects 50% growth in Q2. To top it off, Nvidia believes it can still serve a huge and growing data center market. It cited a third-party estimate in its 2025 GTC event that estimated data center capital expenditures will increase from $400 billion in 2024 to $1 trillion by 2030. That’s huge growth, underscoring why Nvidia is an excellent long-term buy right now.
Another company still benefiting from the AI arms race is Broadcom. Broadcom has two major product lines that benefit from the same tailwinds pushing Nvidia higher: connectivity switches and custom AI accelerators, which are called XPUs. Its connectivity switches connect the thousands of GPUs or XPUs in a data center and help piece back together different parts of a workload to form a viable answer. These are key devices in a data center, especially important for inference.
Inference occurs when an AI model is prompted for an answer, and it’s an area that Broadcom’s XPU could shine. XPUs have the potential to outperform GPUs when the workload is properly configured. GPUs are fantastic at handling various workloads, which makes them so popular when training AI models. However, XPUs could be a better hardware unit for inference because workloads are the same each time. This could open up a huge market for Broadcom, making it an excellent buy.
Taiwan Semiconductor supplies the chips for both companies and will be a winner regardless of who sells the most hardware. This neutral position makes TSMC an excellent investment. Furthermore, management projects that TSMC will grow revenue at nearly a 20% compound annual growth rate (CAGR) over the next five years. This makes Taiwan Semi an excellent stock to capitalize on the AI arms race.
Cloud computing is powering the AI rollout
Buying Nvidia or Broadcom hardware to create a computing network capable of handling AI workloads isn’t cheap. However, businesses and consumers alike are running AI workloads all the time. Most of this computing is being outsourced to cloud computing providers like Amazon‘s (AMZN 2.66%) Amazon Web Services (AWS) and Alphabet‘s (GOOG 2.30%) (GOOGL 2.70%) Google Cloud.
Both services allow clients to rent computing power to run traditional workloads, host websites, or access the most cutting-edge computing devices for AI workloads. This has been a cash-printing business for both Amazon and Alphabet and is one of the top reasons to own both stocks, as growth in the cloud computing space is expected to be prolonged for multiple years.
This makes both Amazon and Alphabet excellent buys, and their base businesses are also strong reasons to pick up shares of both.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet, Amazon, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.