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Nvidia (NASDAQ: NVDA) the company’s shares are up 154% this year, largely driven by insatiable demand for its GPUs amid the spread of artificial intelligence technology.
But Nvidia isn’t necessarily the only way to make money on this chip. feeding frenzy. Which brings us to today’s SA Asks investment question: What is a good alternative to Nvidia stock?
We asked South African analysts Jonathan Weber, Michael Del Monte, Uttam Dey and Jere Wang of JR Research for their picks.
Jonathan Weber: I think Taiwan Semiconductor Manufacturing Company (TSM) is a great alternative. It has a great market position and moat, powerful growth, and benefits from Nvidia’s momentum because it is an Nvidia manufacturer. It is also much cheaper than Nvidia.
Michael Del Monte: There are many ways to play the trade. I prefer to go one level lower to Oracle (ORCL), Dell (DELL), and Hewlett Packard Enterprise (HPE) as buyers of GPUs to build servers and, by extension, build AI factories. Premiums remain relatively low, offering some upside potential from a valuation perspective.
Uttam Dey: Advanced Micro Devices (AMD) has its sleeves rolled up in two key markets where it sells: data center GPUs and PCs. On the data center front, it is expected to regain low-single-digit market share, supported by an impressive product roadmap that is now moving to an annual launch cycle to match NVDA. The PC and device markets will also see some marginal growth. With revenue growth expected in the high teens and earnings expected to exceed that growth, AMD could easily see double-digit stock growth.
Jere Wang of JR Research: Nvidia is benefiting from the expansion of AI data center infrastructure. It leads the market by a mile. However, AMD’s AI business is expected to exceed $4 billion this year, from almost zero last year. I believe AMD can be considered an alternative AI gold mine.
