Two Tech Companies Worthy of Long-Term Investment Over the Coming Ten Years
Technology's influence on our world continues to soar, with artificial intelligence (AI) emerging as a transformative force. This unstoppable trend has catapulted tech firms to become global powerhouses. Here, we examine two tech giants - Alphabet and Salesforce - that investors could confidently purchase and hold for the next decade.
1. Alphabet
A trading at a humble forward price-to-earnings (P/E) ratio of mere 20.5 times 2025 analyst estimates, Alphabet, also known by its ticker symbols GOOGL (-2.14%) and GOOG (-2.11%), is widely considered an undervalued megacap tech bargain. Alphabet retains its lead in search, dominates the world's most-watched streaming service with YouTube, and ranks third in cloud computing.
Through Google, YouTube, and ad networks, Alphabet helms the globe's leading advertising platform, serving ads on its own and third-party sites. AI represents an immense opportunity for this tech titan, as the company can eventually monetize the 80% of untapped traffic it's currently leaving unadorned. AI can also help Alphabet better target ads to its users based on vast data and search history.
Alphabet's cloud computing division, Google Cloud, is flourishing, recording 30% revenue growth in the last quarter. The high-fixed-cost business has also reached breakeven, resulting in a whopping 142% surge in operating income.
The company's strategic partnership with Broadcom resulted in the development of a custom AI chip, which both improves performance and fosters cost-effectiveness. Moreover, Alphabet leverages its expertise in quantum computing and autonomous driving, carving out a competitive advantage in these emerging fields.
2. Salesforce
Another enticing tech stock priced affordably at a forward P/E of approximately 24.5 times analyst estimates for fiscal 2026 (concluding in January) is Salesforce (CRM -0.79%). Salesforce was a trailblazer when it embraced the software-as-a-service (SaaS) model and remains the CRM market's undisputed leader.
Salesforce has now ventured into automation, analytics, and employee communication through acquisitions of Mulesoft, Tableau, and Slack. The company is positioning itself on the cutting edge of AI by exploring agentic AI, which enables AI agents to autonomously complete tasks without human intervention.
Salesforce's new AI agent platform, Agentforce, has gained impressive traction since its October intro. It offers users various AI-powered virtual assistants to automate tasks like billing and transaction disputes, meaning angle for high revenue growth. The company dreams of deploying 1 billion AI agents by fiscal 2026, making Salesforce a formidable AI contender.
In addition to being an innovation leader, Salesforce represents a reliable, long-term investment option for investors.
- Investors looking to diversify their portfolio beyond Alphabet could consider Salesforce, a tech giant with a forward P/E ratio of around 24.5 times analyst estimates for 2026.
- Surprisingly, Salesforce's acquisition of Mulesoft in 2018 has proven to be a strategic move, as Mulesoft's integration capabilities have significantly improved the company's ability to manage complex data flows, a crucial aspect of modern finance.
- By 2025, efficiencies gained through AI implementations in its operations could potentially translate into substantial savings for Salesforce, which in turn could be reinvested in further research and development in the field of AI.
- The impact of Salesforce's AI vision extends beyond the company's operations; partnerships with finance institutions could offer surprising benefits, such as streamlining application processes or enhancing customer service interactions, thereby generating new revenue streams.
