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Buying and holding shares of solid companies for a long time is a great way to make money in the stock market. This strategy not only allows investors to benefit from the power of compounding, but also enables them to capitalize on secular growth trends.

For instance, a $1,000 investment in the Nasdaq-100 Technology Sector Index a decade ago would now be worth more than $5,200, as evident from the chart below.

The index has benefited from multiple secular growth trends over the past 10 years, ranging from the robust demand for 5G smartphones to the advent of connected vehicles to an increase in remote work, which led to stronger sales of computers and workplace collaboration software. And now technology stocks are benefiting big time from the proliferation of artificial intelligence (AI).

AI is impacting multiple industries already, and is expected to contribute a generous $15.7 trillion to the global economy by 2030. That's why now would be a good time to take a closer look at Micron Technology (NASDAQ: MU) and Applied Materials (NASDAQ: AMAT).

Both companies are playing critical roles in driving AI adoption. So if you have $1,000 to spare for investing after paying off your bills, clearing high-interest loans, and saving enough for bad times, it may be a good idea to put that money into these two stocks. Let's look at the reasons why.

1. Micron Technology

Micron Technology has turned out to be a terrific investment over the past decade, turning a $1,000 investment into just over $4,600 as of this writing. That's impressive considering that Micron is a manufacturer of memory chips, a market that's known for being cyclical.

The good news for Micron investors is that the memory industry seems set for a sustained period of solid long-term growth thanks to AI. Micron's peer SK Hynix recently pointed out that the demand for the high-bandwidth memory (HBM) that's deployed in AI chips could increase at an annual rate of 60% in the mid to long term.

Micron is already reaping the benefits of AI-driven growth in the memory market. Its revenue in the second quarter of fiscal 2024 (which ended on Feb. 29) increased an impressive 58% year over year to $5.8 billion. The company is predicted to finish the current year with a sharp increase in revenue from fiscal 2023 levels of $15.5 billion, and it is expected to sustain its healthy growth momentum over the next couple of years as well.

It wouldn't be surprising to see Micron sustaining impressive levels of growth for a longer time, as Grand View Research is forecasting the overall memory market growth of 11.6% through 2030. The memory market's revenue may hit $240 billion at the end of the forecast period, up from just under $125 billion this year.

It is worth noting that the memory market's growth will be fueled by multiple AI-related catalysts ranging from data centers to smartphones to personal computers, paving the way for robust growth in Micron's business over the long run. The chipmaker is preparing to make the most of this opportunity by investing $150 billion in research and development and manufacturing over the next decade.

That's why investors with $1,000 in investible cash might want to consider putting that money into shares of Micron, as it is currently trading at an attractive 18 times forward earnings. That represents a discount to the Nasdaq-100 index's forward earnings multiple of 26, and makes buying this semiconductor stock a no-brainer given the outstanding growth it is delivering and the lucrative long-term opportunity it is sitting on.

2. Applied Materials

A $1,000 investment made in Applied Materials stock 10 years ago is now worth more than $10,500. The company has benefited from the secular growth of the semiconductor market during this period. That's because Applied Materials sells semiconductor manufacturing equipment to foundries such as Samsung, TSMC, and Intel that manufacture chips.

It is worth noting that the global semiconductor market generated revenue of $335 billion in 2014, a number that's expected to jump to $588 billion in 2024. The good news for Applied Materials is that AI is set to drive stronger semiconductor growth over the next decade. AI chip demand is expected to jump 10x over the next decade, generating an annual revenue of $341 billion in 2033.

This explains why semiconductor-focused data platform TechInsights expects the market to double over the next decade, which would be an acceleration over the growth the sector has posted over the past 10 years. This increase in semiconductor sales should lead to an increase in sales of semiconductor equipment as well, since foundries would need to invest in their production capacity to meet higher demand.

Not surprisingly, the semiconductor equipment market is expected to generate $220 billion in annual revenue in 2034, compared to an estimated $105 billion this year, according to Future Market Insights. Applied Materials, therefore, will have a bigger market to tap into in the future, and this should help the company come out of its recent slump.

Applied Materials released fiscal 2024 second-quarter results (for the three months ended April 28) on May 16. The company's revenue was flat compared to the prior-year period at $6.65 billion as growth in AI-related spending was offset by a drop in orders from other segments such as automotive and communications.

Applied Materials CEO Gary Dickerson said on the latest earnings conference call that "AI will be the biggest technology inflection of our lifetimes," and his company is in a nice position to capitalize on this trend. More specifically, Dickerson points out that AI is driving an increase in the consumption of chips such as high-bandwidth memory (HBM) and gate-all-around transistors, and the company is witnessing tangible gains as a result.

For instance, Applied Materials is expecting HBM-related revenue to jump 6x this year to $600 million. On the other hand, the growing adoption of gate-all-around chips will drive $2.5 billion in revenue in 2024 and more than double that level in 2025. This explains why analysts are expecting Applied Materials' revenue to increase 11% in fiscal 2025 to $27.4 billion following an estimated drop of 7% in the current one. However, as the following chart indicates, analysts have been raising their estimates.

An improvement in Applied Materials' growth thanks to AI could send the stock soaring in the long run, which is why investors would do well to buy the stock right away as it is trading at 26 times earnings right now, a discount to the Nasdaq-100's earnings multiple of nearly 30.

Should you invest $1,000 in Micron Technology right now?

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Applied Materials and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.