Forget Nvidia: 2 Artificial Intelligence (AI) Stocks to Buy Instead
When it comes to investing in artificial intelligence (AI), many investors tend to focus on Nvidia as the primary player in the market. However, with Nvidia’s stock price reaching a price-to-sales ratio of 36, some are questioning whether it has become overvalued. As a result, investors are turning their attention to other AI-related stocks that show promise in delivering strong returns.
One such stock worth considering is Taiwan Semiconductor Manufacturing (TSMC). As the leading producer of the most advanced chips in the world, TSMC plays a crucial role in powering the success of companies like Nvidia, Apple, and AMD. With a significant market share in the third-party foundry market, TSMC is well-positioned to benefit from the growing demand for AI chips.
Despite geopolitical tensions surrounding its home island of Taiwan, TSMC has taken steps to mitigate these risks by expanding its fabs outside of Taiwan. The company has also managed to attract business from competitors like Intel, further solidifying its position in the semiconductor industry. While TSMC’s revenue took a hit in recent years, analysts are forecasting a strong recovery with significant revenue growth expected in the coming years.
Another AI-related stock to consider is Micron Technologies (MU). As a key player in the memory chip industry, Micron has seen a surge in demand for its products driven by the AI revolution. The company’s stock has experienced impressive gains over the past five years, outperforming the market and becoming a dividend stock in the process.
In the first quarter of fiscal 2024, Micron reported a year-over-year revenue increase of 16%, indicating a recovery in the memory chip market. Analysts are optimistic about Micron’s future prospects, with substantial revenue growth projected for the next fiscal year. This positive outlook has driven the stock price to near all-time highs, with investors betting on a strong recovery for Micron in the AI-driven market.
As the AI revolution continues to reshape the semiconductor industry, both TSMC and Micron stand out as promising investment opportunities. With strong growth prospects and a focus on AI-related products, these two stocks offer investors a chance to capitalize on the growing demand for advanced chips in the market.
