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NVIDIA (NASDAQ: NVDA)’s stock price has soared 154% this year, and its performance is largely due to the seemingly insatiable demand for its GPU chips due to the popularity of artificial intelligence technology.
But Nvidia isn’t necessarily the only way to profit from chips Eat like crazy. This leads us to today’s SA Ask Investment Question: What are the Nvidia stock alternatives?
We asked JR Research’s SA analysts Jonathan Weber, Michael Del Monte, Uttam Dey and Jere Wang about their picks.
Jonathan Webb: I believe Taiwan Semiconductor Manufacturing Company (TSM) is a good choice. It has an excellent market position and moat, strong growth, and benefits from Nvidia’s momentum because it makes Nvidia. It’s also much cheaper than Nvidia.
Michael Delmonte: You can trade in a variety of ways. I prefer Oracle (ORCL), Dell (DELL), and Hewlett Packard Enterprise (HPE) as buyers of GPUs for building servers and, in turn, building artificial intelligence factories. Premiums remain relatively low, with some upside potential from a valuation perspective.
Uttam Dey: Advanced Micro Devices (AMD) has rolled up its sleeves in the two main markets where it sells: data center GPUs and PCs. On the data center side, it is expected to regain low-single-digit market share on the back of an impressive product roadmap that has now transitioned to an annual release cycle to match NVDA. There will also be some marginal growth in the PC market and devices. With revenue expected to grow in the mid-teens and earnings expected to exceed that, AMD stock could easily see double-digit gains.
Jere Wang from JR Research: Nvidia benefits from the construction of artificial intelligence data center infrastructure. It is the market leader. However, AMD’s AI business is expected to exceed $4B this year, compared with almost zero last year. I believe AMD can be seen as an alternative to mining the AI gold mine.
