The stock market’s rocky start to the year shouldn’t deter investors from considering growth stocks, particularly in the artificial intelligence (AI) sector. Companies like ServiceNow and Nvidia are poised for significant long-term gains. ServiceNow (NOW 2.00%) is a leading provider of AI software that helps businesses streamline workflows and increase operating efficiency. Its subscription revenue grew 19% year-over-year in Q1, exceeding expectations, and it closed 72 deals over $1 million in net new annual contract value. The company is well-positioned to benefit from the growing demand for AI solutions, particularly in the federal government sector where it has over 1,700 customers. ServiceNow’s U.S. public sector revenue grew over 30% year-over-year in Q1.
Nvidia (NVDA 2.33%) is another key player in the AI ecosystem, supplying advanced computing chips necessary for AI training. Its GPUs are considered the gold standard, and the company has been highly profitable with $73 billion in trailing-12-month net income. Nvidia’s new Blackwell chips are in high demand, with analysts expecting the company’s revenue to increase 55% to $201 billion this year. The annual spending on data center infrastructure is expected to reach $1 trillion in the coming years, according to Dell’Oro Group.
Investing $2,000 in these AI stocks could be rewarding over the next decade. ServiceNow’s earnings are projected to grow at an annualized rate of 30%, while Nvidia’s earnings are expected to grow more than 35% per year over the next several years. Both companies are leaders in their respective domains and are positioned to benefit from the growing adoption of AI across industries. Splitting the $2,000 investment between ServiceNow and Nvidia could provide a balanced exposure to the AI sector, with potential for handsome gains in the long term.
