- NVDA
- GOOG
- MU
There are some incredible artificial intelligence (AI) stocks to invest in right now. Micron (NASDAQ: MU) is booming from a memory chip shortage and looks primed to continue rising. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is experiencing success on several fronts in the AI arms race, and looks poised to deliver strong returns as well. However, neither of these stocks has anything on Nvidia (NASDAQ: NVDA).
Nvidia is at the heart of the AI build-out, and looks like a stock primed to continue rising over the next few years. I think that makes it a top stock to buy in today’s market, and investors should consider loading up on shares now to benefit from its absurdly low valuation.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia.Continue »
Nvidia expects huge growth in the future
For as long as the AI arms race has been going on, the question surrounding Nvidia has been: Can it keep up its growth rate? While the resounding answer from most investors has been “No,” Nvidia continues to defy expectations and even provides guidance to back it up.
For next year, Nvidia expects to grow its revenue at a 70% pace. Given how large a company Nvidia is, that’s an incredible projection. There has never been a company as large as Nvidia, let alone half the size, that has grown this rapidly. The market really doesn’t know what to do with the stock, as all of the numbers indicate that Nvidia will be a far larger company than any other U.S. business. However, I know what to do: Buy the stock.
Nvidia is at the heart of the AI arms race and will remain there due to its early lead. Nvidia’s GPUs are best in the business, and with a new architecture launching, they will unlock features and capabilities previously unthinkable. While there is some rising competition for custom AI chips, there will always be a place for Nvidia GPUs due to their flexibility and universal nature. This positions Nvidia well to thrive in the coming years and could allow the stock to reach new heights.
But just how far can it go?
Nvidia’s valuation is cheap for its potential
Right now, Nvidia’s stock trades at a very attractive 28 times earnings.
That’s a pretty typical valuation for a big tech stock, but there’s only one problem: Nvidia is no ordinary big tech stock. No other big tech stock is growing as quickly as Nvidia. Its peers, Advanced Micro Devices and Broadcom, trade at 144x and 46x earnings, respectively.
