Meta, Alphabet Poised for Decade-Long Reign as AI Leaders

When it comes to investing in growth stocks for the long haul, two companies stand out as top picks for the next decade: Meta Platforms and Alphabet. Both businesses have built-in advantages that will help them continue to compound over time.

META has leveraged AI to drive growth in its core business, with renowned investor Bill Ackman calling it 'one of the clearest beneficiaries of AI.' The company's digital advertising platform is set to surpass Alphabet for the No. 1 spot soon and is being fueled by AI that improves content recommendation algorithms and ad monetization.

META also has huge potential with its new AI agents, Muse, which can perform various tasks for users and open up a large revenue stream through affiliate and transaction fees.

Alphabet, on the other hand, has a complete AI stack and a large distribution edge. Its core business remains Google Search, but it's morphed into search/discovery with AI. The company holds a dominant position in this area due to three distinct advantages: distribution, its two-sided ad network, and unmatched data collection.

Alphabet's custom AI chips called Tensor Processing Units (TPUs) give the company a huge cost advantage, saving it both in training its own models and running AI inference. It even started selling TPUs directly to Anthropic, opening up another revenue stream.