Explore Alternative AI Investment Opportunities to Nvidia with These 3 Promising Stocks

Explore Alternative AI Investment Opportunities to Nvidia with These 3 Promising Stocks

Of course, Nvidia is on fire. Its stock is up 1,980% over the past 5 years, meaning a $10,000 investment in 2019 would be worth a staggering $208,000 today.

But as the saying goes, past performance does not guarantee future results. So let’s consider some alternatives to the king of AI stocks. Here are three names I think would be wise for AI-focused investors to consider.

Explore Alternative AI Investment Opportunities to Nvidia with These 3 Promising Stocks

Image source: Getty Images.

Advanced microsystems

The first is Advanced microsystems (NASDAQ:AMD). Granted, AMD may not have attracted the same level of AI buzz as rival Nvidia, but the company is also benefiting from the AI ​​revolution. Indeed, AMD shares have soared 179% since January 2023.

Like Nvidia, AMD designs advanced semiconductors that can be used to form major language models. Its latest AI-focused offering is the MI300X chipunveiled in December 2023. So far, MicrosoftOpenAI and Metaplatforms have all expressed interest in using the chip, which offers an alternative to the current AI workbench, Nvidia’s H100 chip.

The MI300X could help AMD establish itself in the AI ​​accelerator market, especially given its cost. It retails for $10,000 to $15,000, well below the H100’s price of $40,000.

With the first shipments of the MI300X happening now, it will take some time to see what demand for the chip looks like. However, AMD CEO Lisa Su expressed optimism, both for the MI300X and the overall AI market. Last December, it predicted that the AI ​​chip market would reach $400 billion by 2027, up from around $40 billion in 2023. If its prediction is anywhere near accurate, AMD investors will have something to smile about in the years to come.

Oracle

The next step is Oracle (NYSE:ORCL)an under-the-radar AI stock if ever there was one.

The company is probably best known for being one of the classic stocks of the “tech bubble” of the early 2000s. Shares of the database software giant soared during the first wave of adoption of The Internet in the late 1990s, before collapsing 84% during the 2001-2003 bear market.

However, Oracle is now back and on a roll with its data center business. In its latest earnings report (for the three months ending February 29, 2024), Oracle exceeded expectations, as evidenced by:

  • $13.3 billion in total revenue, up 7% year-over-year

  • $5.1 billion in cloud revenue, up 25% from a year ago

  • $2.4 billion in net profit, an increase of 27% from the previous year.

Additionally, the company raised its forward guidance. Indeed, Chief Financial Officer (CFO) Safra Catz was very optimistic, saying the company would likely exceed its goal of $65 billion in annual revenue by 2026. Additionally, Chairman Larry Ellison pointed out that the spending surge from hyperscalers like Microsoft was shifting. The Oracle Needle.

In short, the AI ​​wave is helping Oracle regain its momentum – and investors should take note.

Palantir Technologies

The last one is Palantir Technologies (NYSE:PLTR)the company at the forefront of AI-powered Big Data analytics.

Some investors might find Palantir’s business model difficult to understand. In a nutshell, Palantir helps organizations manage their operations more efficiently. To do this, the company uses several AI-based software platforms that analyze huge data sets, recognize patterns and suggest solutions.

Financially, it is clear that Palantir is racking up victories. Its number of customers, revenue, net profit and free cash flow are all growing. Additionally, the company is beginning to move into the private sector after deriving much of its initial revenue from government contracts.

Even today, Palantir generates more revenue from government entities ($1.2 billion in 2023) than from commercial customers ($1.0 billion in 2023).

However, this is subject to change. Palantir’s commercial revenue is up about 20% year over year, while government revenue is up 14%. If this trend continues, Palantir’s commercial revenues will exceed those of the government by 2027.

Either way, investors shouldn’t sleep on Palantir. The company’s rapid growth means it could become the next big name in AI investing.

Should you invest $1,000 in Palantir Technologies right now?

Before buying Palantir Technologies stock, consider this:

THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now…and Palantir Technologies was not one of them. The 10 selected stocks could produce monster returns in the years to come.

Equity Advisor provides investors with an easy-to-follow plan for success, including portfolio building advice, regular analyst updates, and two new stock picks each month. THE Equity Advisor The service has more than tripled the performance of the S&P 500 since 2002*.

See the 10 values

*Stock Advisor returns March 25, 2024

Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jake Lerch has positions at Nvidia. The Motley Fool features and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, Oracle and Palantir. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Forget Nvidia: Here are 3 other artificial intelligence (AI) stocks to buy instead was originally published by The Motley Fool

Source Reference

Latest stories