When investing for the long term, a good understanding of overall business fundamentals is required to find the best stocks to buy and hold. Investors should focus on companies with solid revenue growth, advanced technologies, and strategic market leadership to generate stable earnings over the long term. Currently, companies that excel in high-performance computing and cloud services are smart choices for stocks to buy and hold for several reasons.

Companies in these areas typically have solid foundations and growth potential, offering solid opportunities for long-term profits. Their solid performance in high-demand computing solutions underscores their clear market advantage and value creation potential.

Likewise, their expertise in artificial intelligence (AI) technology enables them to succeed in cloud services and AI infrastructure. Key developments such as the introduction of next-generation AI accelerators and the growth of data centers give them a competitive advantage to meet consumer demand.

Finally, these innovators in AI and cloud computing have made significant strategic investments in infrastructure. As a result, cloud revenues have increased significantly, and the continued investment underscores the focus on driving and sustaining competitive advantage.

The three stocks on this list represent companies that are thriving in the industries mentioned above and therefore offer great potential for investors looking for stocks to buy and hold.

Advanced Micro Devices (AMD)

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Advanced micro devices (NASDAQ:AMD) builds data centers and manufactures high-performance computing products. AMD’s revenue was $5.8 billion in the second quarter of 2024, up 9% year-over-year. This increase was driven by strong performance in the data center and customer segments. The data center segment grew 115% year-over-year to reach $2.8 billion, accounting for nearly 50% of AMD’s revenue.

The increase in data center revenue was driven by shipments of Instinct MI300 GPUs and EPYC CPUs. The increase in Instinct MI300 GPU shipments significantly increased data center revenue, reflecting high demand for AMD’s high-performance computing solutions. In addition, double-digit increases in EPYC CPU sales further increased data center revenue.

EPYC processors are a core part of AMD’s data center strategy, delivering high performance and efficiency. As a result, data center revenue increased 21%, indicating robust growth. This was achieved despite weakness in gaming and embedded products.

The customer segment also grew, with revenue increasing 49% year-over-year to $1.5 billion, driven by AMD Ryzen processors and early shipments of the next generation Zen 5 processors.

Due to its strong revenue growth across all segments, AMD is one of the top stocks to buy and hold.

Alphabet (GOOG, GOOGL)

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alphabet (NASDAQ:GOOG:GOOGLE) focuses primarily on AI infrastructure and cloud services. Alphabet’s cloud division generated quarterly revenue of over $10 billion in the second quarter. As a result, operating profit exceeded $1 billion, underscoring Alphabet’s strong position in the cloud services space.

AI infrastructure and generative AI solutions are the driving forces behind this success. These solutions have generated billions in revenue since the beginning of the year, which underlines the high market demand. Alphabet’s influence on AI demand is evident in new data centers in Malaysia and the USA.

The launch of Trillium, a sixth-generation AI accelerator, also marks solid advances in the company’s computing power. Trillium achieves nearly five times better computing performance per chip. It also improves power efficiency by 67% compared to TPU v5e. These advances support large-scale AI applications and will help Alphabet maintain its competitive advantage.

In addition, Alphabet’s Gemini AI models are versatile and efficient, making them well-suited to various AI use cases. The various models are integrated into key Alphabet products such as Search, Workspace, and Google Messages, improving the user experience and demonstrating Alphabet’s AI strength.

Overall, Alphabet is one of the best stocks to buy and hold thanks to its revenue milestones, expanding its AI capabilities, and increased investments in new data centers.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is known for its cloud computing services and AI technologies. The company achieved solid revenue growth in 2023. Annual revenue exceeded $245 billion, up 15% year-over-year. In the fourth quarter of fiscal 2024, Microsoft’s revenue increased 15% year-over-year.

These impressive numbers underscore Microsoft’s strong growth trajectory across all business areas. Cloud revenue alone exceeded $135 billion, an increase of 23% year-on-year. The increase in cloud revenue is due to the Azure expansion, the integration of AI services, and successful migrations.

In addition, Microsoft invested $19 billion in capital expenditures, primarily in cloud and AI infrastructure. Heavy investments in data centers, CPUs, and GPUs will help Microsoft meet the demand of the AI ​​market and support the company’s overall growth. Expanding the data center presence across four continents ensures scalability and global support. These assets are critical to maintaining Microsoft’s competitive advantage in cloud services.

At the time of writing, Yiannis Zourmpanos held long positions in AMD and GOOG. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publishing policies.

At the time of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.