Nvidia has been a top performer in the AI race, with a 149% increase in stock price in the first half of 2024 due to tripled revenue. However, the valuation of Nvidia appears high, with a forward P/E ratio of 45, which could limit gains. Other AI server stocks such as Supermicro (NASDAQ: SMCI) and Dell Technologies (NYSE: DELL) are also performing well and could outperform Nvidia for the rest of the year.
Supermicro sells rack-mount systems for data centers and has seen its stock rise 188% in 2024. It has close relationships with suppliers like Nvidia and AMD, leading to innovative solutions and faster growth. The company’s earnings per share are expected to grow at a rate of 46% annually, higher than Nvidia’s 33% estimate, making it a good investment. Additionally, Supermicro offers better value with a forward P/E ratio of 35 compared to Nvidia’s 45.
Dell Technologies, on the other hand, has seen its stock rise 80% this year and could outperform Nvidia due to accelerating demand for its AI servers. AI server revenue for Dell has reached $1.7 billion, and the company’s order book grew by 31% in the latest quarter. Analysts predict profits to grow by 12% annually, and with a forward P/E of 18, the stock looks attractive for potential earnings growth.
Investors looking for alternatives to Nvidia may find opportunities in Supermicro and Dell Technologies, which offer competitive valuations and strong growth potential in the AI server market. The Motley Fool recommends careful consideration before investing in Super Micro Computer stock and suggests exploring other top stock picks for potential high returns. John Ballard, a contributor to The Motley Fool, has positions in AMD, Nvidia, and Tesla, and suggests consulting with a financial advisor for personalized investment advice.
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https://finance.yahoo.com/news/nvidia-stock-149-2-stocks-085500636.html