There is perhaps no company that represents the artificial intelligence (AI) boom more than Nvidia (NASDAQ:NVDA). The thriving chipmaker is currently operating at full capacity. And it has rewarded its shareholders in remarkable ways.
I’m sure you’re looking for ways to expose yourself to the current AI trend. However, perhaps it’s best to forget about Nvidia. Consider buying this other one instead.”Magnificent Seven” actions instead.
High expectations for Nvidia
Nvidia has once again impressed investors with a fantastic financial report. During the three-month period ended April 28 (first quarter 2025), the company revealed that its revenue soared 262% year-over-year to $26 billion. Operating profit is even more impressive, up 690%.
Demand for Nvidia chips is stronger than ever, especially in the data center segment. Looking ahead, executives estimate sales will reach $28 billion in the current fiscal quarter. While this would mark a quarter-over-quarter and year-over-year slowdown, it would still mean huge growth for the company.
Unsurprisingly, the hype around Nvidia also continues to skyrocket, with the market remaining enamored with AI-focused companies. Stocks are trading at a breakneck pace price-sales ratio (P/S) of 35.9, which indicates how high investor expectations are. Nvidia currently seems to have a perfect price.
Investors looking to buy Nvidia stock today probably aren’t too happy about missing out on the stock’s monumental rise. That may be a bold statement, but at this point I think it’s a perfect example of people trying to chase returns, which is not a smart investment strategy.
Dominant Internet Company
It’s hard to tell investors to ignore one of the hottest stocks on the market. But there is a company that is showing good results and is already a leader in AI. I’m talking about Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG). The $2.2 trillion company has been a big winner for shareholders, and it’s poised to continue that trend.
Despite a whopping $307 billion in revenue last year, consensus Wall Street analysts estimate that revenue will grow at a compound annual rate of 11.5% between 2023 and 2026. This growth will come from increased use increase in Alphabet’s many products and services. which will help generate more digital advertising revenue. This is where AI can help you.
Sundar Pichai, CEO of Alphabet, proclaimed in 2016 that the world would shift from mobile to an AI-first approach. This type of thinking has placed the company at the forefront of this emerging technology.
Alphabet has such a massive user base, with six products used by at least 2 billion people, that it’s easy to deliver new AI features with almost instant mass adoption. Some of the most well-known services, like Photos, Maps, Gmail, and YouTube, have long used AI in one form or another.
And when it comes to Google Cloud, there are more opportunities to make a bigger impact. As the third largest player in the sector with a turnover of…
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