All eyes were on Nvidia (NASDAQ:NVDA) over the past year, with its stock soaring more than 200%. The company has benefited massively from the rise of artificial intelligence (AI), with its graphics processing units (GPUs) becoming the go-to for developers around the world. In fact, Nvidia’s meteoric rise allowed it to briefly overtake Apple on June 5, when its market capitalization reached $3 trillion, it became the second most valuable company in the world.
As the AI market grows, Nvidia will likely have a lot to offer investors in the years to come. However, while its recent rise has benefited current investors, it has fundamentally made the stock more expensive.
This chart uses forward price-to-earnings (P/E) and price-to-sales to show that Nvidia stock offers less value than two other AI companies, Intel (NASDAQ:INTC) And Microsoft (NASDAQ:MSFT). Therefore, if you’re looking for a way to invest in the burgeoning AI market, it might be worth considering one of these options over Nvidia to get the most bang for your buck.
So forget about Nvidia and consider investing in one of these AI stocks now.
1.Intel
At the Computex technology conference in Taipei on June 4, Intel CEO Pat Gelsinger said: “We want to build everyone’s chips, everyone’s AI chips. We want them to be built taking advantage of American factories. »
Gelsinger’s comments come as the company is in the process of restructuring its entire business around manufacturing. Intel announced last year that it would move to a foundry model in a bid to regain its position as the world’s top chipmaker, overtaken by Semiconductor manufacturing in Taiwan And Samsung since 2017.
Intel’s plan involves building at least four factories in the United States and will benefit from President Biden’s CHIPS Act, an initiative created to expand U.S. manufacturing capabilities. Intel will receive $8.5 billion to help it develop its foundry, more than Samsung or TSMC.
Over the past year, Intel has been in strong competition with Nvidia and Advanced microsystems in AI. Each of them has AI accelerators in the market and is working to attract new customers. However, Intel’s foundry model could differentiate it from its competitors. While Nvidia and AMD focus on design, Intel could make significant gains in the coming years as demand for chips increases and it becomes the leading U.S. manufacturer.
Intel still has a long way to go dominate the AI. However, its free cash flow increased by $2 billion between January and May, suggesting its business is moving in the right direction. As a result, Intel’s stock is worth considering now.
2.Microsoft
Microsoft’s stock trades at 36 times earnings, so it’s far from the biggest deal on Wall Street. However, it represents better value than Nvidia and could have greater growth potential in AI in the long term, thanks to its massive user base.
Local brands like Windows, Office, Xbox, Azureand LinkedIn attract billions of users and have made Microsoft a household name…
