The field of Artificial Intelligence (AI) has been rapidly growing in recent years, and it’s expected to continue doing so over the next decade. In fact, generative AI spending is projected to increase 20 times over this period, creating a multitude of opportunities for companies that are well-positioned to capitalize on this trend.

In this article, we’ll highlight three stocks that have tremendous potential for long-term growth and can be purchased with just $200. These companies offer innovative products, strong competitive advantages, and a clear path to success in the AI space.

1. Taiwan Semiconductor Manufacturing Company (TSMC)

A Leader in Chip Manufacturing

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s leading chip manufacturer, capturing most orders for high-end chip designs due to its advanced technology. The company’s major clients include Nvidia and Apple, which are among the largest players in the AI market.

In its recent second-quarter earnings report, TSMC reported strong results, exceeding expectations. CFO Wendell Huang attributed this success to "strong smartphone and AI-related demand for our leading-edge process technologies."

Investing in TSMC: A Secular Opportunity

Investing in TSMC is a secular way to capitalize on the growing demand for AI chips. Although Nvidia currently dominates the GPU market, other companies are developing designs to compete with them. However, TSMC’s advanced technology ensures that it will continue to receive business from these companies.

Geopolitical risks add some uncertainty to the company’s prospects, but its current stock price looks attractive. Shares trade at a forward Price-to-Earnings (P/E) ratio of 27.2. With AI driving demand, TSMC could increase prices, expand margins, and boost earnings, justifying its current valuation and associated risks.

2. Snowflake

A Crucial Player in AI Development

Snowflake plays a crucial role in AI development by providing cloud infrastructure that helps enterprises manage their data across multiple public cloud services. Its platform, Cortex AI, allows businesses to apply large language models to their data, creating unique generative AI applications.

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