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Nvidia’s (NASDAQ:NVDA) shares have soared 154% this year, largely driven by the insatiable demand for GPU chips driven by the proliferation of AI technology.
But that’s not the only way Nvidia makes money with its chips. Feeding frenzy. Moving on to today’s SA investment question. What are some good stocks to replace Nvidia?
We asked JR Research SA analysts Jonathan Weber, Michael Del Monte, Uttam Dey and Jere Wang which stocks they favor.
Jonathan Beaver: I think Taiwan Semiconductor Manufacturing Company (TSM) is a great alternative. It has a great market position and entrenchment, strong growth, and is a Nvidia manufacturer, so it benefits from Nvidia’s momentum. It’s also considerably cheaper than Nvidia.
Michael Del Monte: There are several ways to trade. I prefer to buy GPUs for server builds and then move down to Oracle (ORCL), Dell (DELL) and Hewlett Packard Enterprise (HPE) to build AI factories. Premiums remain relatively low, providing some upside potential from a valuation perspective.
Utam Day: Advanced Micro Devices (AMD) is rolling up its sleeves and selling in two key markets: data center GPUs and PCs. In the data center space, it is expected to regain low single-digit market share, thanks to an impressive product roadmap that is shifting to an annual release cycle in line with NVDA. The PC market and devices are also expected to show some modest growth. With revenue expected to grow in the high teens and earnings ahead of that, AMD could easily see double-digit growth in its stock price.
Jere Wang of JR Research: Nvidia is benefiting from building AI data center infrastructure. It is a mile ahead of the market. But AMD’s AI business is expected to grow from almost nothing last year to over $4 billion this year. I believe AMD can be seen as an alternative to riding the AI goldmine.
/cdn.vox-cdn.com/uploads/chorus_asset/file/25520754/Screenshot_2024_07_07_at_12.01.27_PM.png?w=150&resize=150,150&ssl=1 "Apple Intelligence and a better Siri could come to iPhones this spring.")
