NVIDIA, the leading AI company, recently became the most valuable company in the world with a market value of over $3 trillion. While the company has seen incredible growth in sales of its AI chips, its stock valuation has raised concerns about a potential bubble. Trading at 40 times sales, the stock is at risk of a significant hit if it fails to meet high expectations and sustain its profit margins in the face of growing competition.
Investors looking to invest in AI with less risk may consider Intel and Qualcomm as safer alternatives. Intel, known for its AI accelerators, is expanding into the semiconductor foundry market and expects to become a significant player by 2030. The company has already secured over $15 billion in foundry business and aims to capitalize on the growing demand for AI chips.
Meanwhile, Qualcomm is making its mark in the PC market with its powerful AI-enabled Arm-based processors. The company has high hopes of capturing a significant share of the Windows PC market in the next five years, as more devices incorporate AI capabilities. Qualcomm’s entry into the PC market presents a new revenue opportunity and allows consumers to benefit from AI-powered features.
As competition in the AI industry heats up, investors may want to consider Intel and Qualcomm as lower-risk options compared to NVIDIA, whose stock price could suffer if it fails to meet lofty expectations. The market for AI chips continues to evolve, with various companies vying for a piece of the pie.
Timothy Green has positions in Intel and The Motley Fool recommends investing in Advanced Micro Devices, Microsoft, NVIDIA, and Qualcomm. The Motley Fool advises considering long-term investment options in Intel and Microsoft. While NVIDIA remains a strong player in the AI market, Intel and Qualcomm offer alternative investment opportunities with potentially lower risk.
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https://www.fool.com/investing/2024/06/22/think-nvidia-stock-is-a-bubble-buy-these-2-ai-stoc/