These Stocks Are Skyrocketing and Are Still Solid Long-Term Buys

Successful enterprises capitalizing on substantial growth prospects will consistently reach record-breaking share prices in the long run. Therefore, investors need not shy away from purchasing top-tier growth stocks at their current peak. Instead, focus on comprehending the business’s ongoing momentum and how sustainable its growth is for future projections.

Despite some analysts doubting if the peak has been reached for the “Magnificent Seven,” Nvidia (NVDA) and Microsoft (MSFT) have kept soaring to fresh heights after impressive earnings performances this year. Here’s why these tech heavyweights remain worthwhile investments for at least the next five years.

1. Nvidia

Nvidia’s stock is nearly reaching record levels following favorable updates. After discussions between CEO Jensen Huang and President Trump, it was announced that the U.S. government will permit Nvidia to restart sales of its H20 chip in China. This decision could potentially generate billions in quarterly income for the company.

Despite the restrictions on sales in China, Nvidia was already anticipated to generate a staggering $200 billion in revenue this year, representing a 53% growth compared to fiscal 2025 (ending in January). The resumption of sales for their H20 product is expected to further boost these estimates, potentially leading to an upward revision in both short-term revenue and earnings forecasts, which could drive the stock price up.

The H20, essentially, is a less powerful variant of Nvidia’s advanced H200 data center chip. Last year, sales in China accounted for approximately 13% of the company’s total revenue, which amounted to $17 billion. Prior to halting shipments due to new licensing regulations, the H20 brought in around $4.6 billion in Q1 revenue. This unrealized revenue, roughly $2.5 billion, is expected to be realized in Q3, potentially boosting analysts’ current prediction of a $45 billion revenue for Q2.

Over the coming year, it’s possible that Nvidia’s China-based business could see a substantial increase as a proportion of its overall earnings. During their recent meeting with financial analysts, Nvidia’s Chief Financial Officer, Colette Kress, mentioned that the company had anticipated approximately $8 billion in H20 orders for fiscal Q2 before any restrictions were implemented.

This new development further boosts Nvidia’s short-term progress, as the high demand for its Blackwell chip is expected to enhance Nvidia’s profit margins and earnings during the second half of the year. Analysts currently predict a significant increase in quarterly adjusted non-GAAP earnings, with growth potentially reaching 47% year over year in Q2, followed by 44% in Q3, and 50% in Q4. However, these estimates might not account for potential H20 sales yet, given that this news was announced only recently within the last week.

For some time ahead, despite the competitive buzz with custom chip manufacturers, Nvidia has the potential for continued high growth. The expanding AI infrastructure market offers a colossal chance, ample for numerous players to thrive. Nvidia is gearing up to release its next-generation Vera Rubin chip in the upcoming year, ensuring its progress continues.

By fiscal year 2030, analysts anticipate that Nvidia’s revenue will increase by approximately 21% each year, amounting to a staggering $342 billion. The earnings growth is forecasted to be slightly quicker at 23%. This projection aligns with Huang’s belief that Nvidia will seize a significant share of the estimated $1 trillion in annual data center expenditure over the next four years.

Investing in Nvidia’s stock might be a smart choice for long-term growth, as its earnings could potentially increase at a similar pace. This makes it an attractive option for investors seeking to buy and hold for a prolonged period, despite its current price hovering around $170 per share.

2. Microsoft

Last quarter saw stronger-than-anticipated interest in AI services within Microsoft’s enterprise cloud sector, demonstrating robust demand. Given Microsoft’s position as a productivity software pioneer, the company stands to reap substantial benefits over time by embedding AI technology into its various products. This strategic move has contributed significantly to the stock’s impressive rise to record highs since the release of its Q3 fiscal earnings in late April.

Microsoft Azure ranks second as the leading enterprise cloud service provider, steadily increasing its share in a rapidly expanding market valued at $348 billion, according to Synergy Research. In the last quarter alone, Azure’s revenue surged by 33% compared to the previous year. However, what piqued investors’ interest was that a significant 16 percentage points of this growth stemmed from artificial intelligence (AI) services.

It appears that every sector is rapidly adopting this groundbreaking technology and increasing their commitment to it. Microsoft’s recent moves suggest that the surge in AI investment is far from over. Notably, CEO Satya Nadella announced plans to enlarge Microsoft’s data center network, with 10 new centers opening across 10 different countries.

Microsoft Copilot, the AI-driven assistant from our company, has gained approximately 300,000 corporate clients this year alone, marking a threefold increase compared to the same period last year. It’s not only capturing larger contracts in the enterprise market but also convincing existing customers to buy additional seats for their staff members.

Microsoft is readying itself for the upcoming leap in cloud services by offering a suite of software and development tools tailored towards quantum computing. The Azure Quantum platform brings together several pioneers who offer simulators and other tools to clients, among them are IonQ and Rigetti.

Microsoft’s significant investments in AI technology and its dominance within software have positioned it advantageously, as indicated by financial analysts’ projections for growth. These projections suggest that Microsoft could report a revenue of approximately $279 billion for the fiscal year concluding in June 2025, with a projected annualized increase of around 13% over the subsequent four years. Earnings are anticipated to expand at an even quicker pace, with an annualized growth rate of 15%. This robust expansion is predicted to double the company’s stock value by 2029.

2025-07-20 18:46

1. Nvidia

2. Microsoft

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