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The best stocks to own forever are usually the ones that know how to keep reinventing themselves as the world changes. Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) fit that description well because they're already embedded in everyday applications used by billions, all while using artificial intelligence (AI) to make their businesses more future proof.
Microsoft's long-standing dominance in enterprise software makes it the logical place to start.
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Microsoft is one of those rare companies where the shift to AI is strengthening a business it already dominates. The company is transforming itself into the software layer for the AI era, with Azure, Microsoft 365, GitHub, and Copilot all moving in the same direction.
The clearest example is Azure. Microsoft Cloud revenue continued to accelerate, while Azure and other cloud services grew strongly in the latest fiscal year. More importantly, Microsoft has been integrating AI across its ecosystem, rather than treating it as a stand-alone product. Customers can build and run AI applications through Azure while using Microsoft's data, security, and productivity ecosystem.
Consider Copilot. Rather than simply competing with other AI chatbots, Microsoft is embedding AI directly into the software people already use at work. In fact, Microsoft 365 Copilot has already passed 30 million paid seats.
Plus, the opportunity extends beyond Copilot. GitHub Copilot is bringing AI into software development, Dynamics is integrating AI into business applications, and Azure provides the infrastructure. As a result, Microsoft has multiple ways to benefit from companies deploying AI across their everyday operations.
Microsoft's broader business also gives it something many new AI companies don't have: an established base of customers it can easily distribute new technology to. This is exactly the kind of stability that long-term investors are looking for. Meanwhile, Microsoft's latest results showed continued strength across its cloud and productivity businesses, while its commercial remaining performance obligations (RPO) surged, providing better visibility into long-term revenue.
But Microsoft isn't the only game in town. Another tech giant is deploying AI across one of the world's largest consumer ecosystems.
Alphabet may be one of the best examples of a company where AI can strengthen rather than undermine the core business. Instead of treating AI as a replacement for Search, Google is using AI to make it more capable, while integrating Gemini across its massive ecosystem of consumer applications.
Google says AI Mode has surpassed one-billion monthly users, while AI-powered features have contributed to continued growth in Search queries. In other words, giving users better AI tools can encourage them to search more frequently and explore more complex questions.
That matters for long-term investors because Google doesn't have to build an entirely new user base for AI. It can introduce AI to people who already use Search, Android, Chrome, and other Google services every day.
But Alphabet's AI ambitions go beyond consumer chat. Google Cloud is a major beneficiary of enterprise AI, with customers using Google's infrastructure, models, and tools to develop and run AI applications. Alphabet reported strong Cloud growth in its latest quarter, driven by solid demand for AI solutions.
Looking ahead, Google is also pushing into the next stage of AI: agents. Gemini Enterprise allows companies to build and manage AI agents that can perform multistep tasks, while Google is integrating similar features into Search and other applications.
Alphabet's advantage is that it controls much of the technology stack required for this AI shift to work. It develops its own models, operates data centers, owns a global distribution network, and runs one of the world's largest advertising businesses. This gives Alphabet a sound business that can grow with AI over the long run.
Put side by side, these two companies show different paths to the same destination: a business built to keep growing for decades.
Investors looking for stocks to own for decades should find Microsoft and Alphabet appealing, because their businesses are evolving with technology rather than being disrupted by it. Both are embedded in everyday consumer applications, cloud infrastructure, and AI, giving them multiple avenues for continued growth.
For investors who think in generations rather than quarters, these are exactly the kind of businesses worth owning well beyond this market cycle.
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Rick Orford has positions in Alphabet and Microsoft. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool has a disclosure policy.
2 Stocks Worth Buying and Holding for Life was originally published by The Motley Fool
