2 Top AI Stocks Down 28% or More to Buy and Hold for 10 Years

Leading artificial intelligence (AI) companies are seeing growing demand that points to a lucrative opportunity. Investors who keep a long-term perspective and take advantage of market dips to buy shares of competitively positioned companies at discounts will be in the best position to profit from this opportunity.

Here are two AI stocks trading down from their recent highs that could be worth a lot more in 10 years.

1. Nvidia

Nvidia's (NVDA 2.91%) breakneck innovation in the AI chip market has powered its way toward the top of the semiconductor industry. It controls over 90% of the share of graphics processing units (GPUs) used in servers for AI workloads, according to IDC, making this chip leader still one of the best ways to profit from the AI opportunity.

What makes Nvidia special is it has tailored its GPU technology to meet the needs of different industries, including automotive, healthcare, data centers, and more. Its chips are used for everything from training the AI models for OpenAI's ChatGPT to powering a PC for running video games. It is currently ramping its new Blackwell semiconductor chips and AI computing platform, which is 2.5 times more powerful than its previous-generation Hopper GPUs.

Nvidia's GPUs are the gold standard. There are 5.9 million developers using its CUDA programming platform. CUDA allows AI researchers and other customers to build applications optimized specifically for Nvidia's GPUs, which helps cement its lead.

Nvidia's market leadership and innovation allow it to price its chips to earn extremely high profits. It generated $60 billion of free cash flow last year on $130 billion of revenue. This provides more resources to stay on the cutting edge of GPU innovation.

Analysts expect Nvidia's revenue to grow 57% this year, driven by sales of its Blackwell products. Over the long term, analysts expect earnings to grow 36% on an annualized basis. This is plenty of growth to support the stock's current valuation. With shares trading down about 26% from recent highs and trading at 23 times this year's consensus earnings estimate, investors are getting solid value that could lead to market-beating returns over the next 10 years.

2. ServiceNow

ServiceNow (NOW 0.27%) is a leader in business automation software. With the company reporting 21% year-over-year revenue growth in Q4 2024, the stock's recent 33% haircut is a great buying opportunity. ServiceNow is experiencing strong demand for its AI platform that isn't reflected in the share price.

Many companies use ServiceNow to streamline business workflows and increase efficiency. It has over 8,400 customers, including 85% of the Fortune 500. It's well positioned to benefit from exploding demand for agentic AI software, where applications are smart enough to understand what tasks need to be performed to solve a problem without human input.

ServiceNow is a subscription-based business. The recurring revenue from subscriptions helps it print cash like there's no tomorrow. In 2024, it generated $3.3 billion in free cash flow on $11 billion of revenue.

It is in the sweet spot of the AI opportunity. Companies are spending massive amounts on Nvidia's GPUs to deliver the kinds of automated applications that ServiceNow offers. The number of deals for its Now Assist AI software grew 150% quarter over quarter in Q4.

The company's subscription revenue grew to $10.6 billion last year, and management expects that to reach $15 billion in 2026. Analysts expect the company's earnings to grow 30% on an annualized basis in the coming years. Buying some shares today should deliver excellent returns by 2035 when automated software should be integral to how businesses operate.