Many investors in artificial intelligence (AI) may be feeling regretful for overlooking Nvidia’s remarkable growth. With Nvidia’s stock soaring by 280% over the past year and an astonishing 1,800% over the last five years, it has emerged as a prominent player in the AI realm.
However, Nvidia is just one among many AI stocks, and the AI landscape encompasses far more than just semiconductor companies. Despite missing out on Nvidia’s surge, there are still ample opportunities in the AI sector. Here are alternative AI stocks that investors can consider:
Amazon (NASDAQ: AMZN): While there may be other hot AI stocks in the market, Amazon remains a compelling choice for investors. Here’s why:
Firstly, Amazon holds the position of the largest cloud services provider through Amazon Web Services (AWS), commanding approximately 31% of the global cloud services market. This is significant as many new generative AI tools and applications rely on cloud services like AWS. With its dominance in cloud infrastructure, Amazon stands to benefit substantially from the ongoing AI revolution.
Moreover, Amazon’s extensive e-commerce business synergizes well with various AI applications. For instance, the company introduced Rufus, an AI-powered shopping assistant aimed at providing assistance to users through answering queries, conducting price comparisons, and offering product recommendations.
Additionally, Amazon leverages AI across various facets of its operations, including optimizing prescription drug delivery through Amazon Pharmacy, reducing environmental impact via AI-generated recommendations to minimize packaging usage, enhancing shopping recommendations with Amazon Fashion, and refining conversation capabilities with Alexa-enabled devices.
With its robust performance, boasting a 73% increase in shares over the past year and solid revenue growth of 13%, Amazon remains a sound choice for AI-focused investors.
The Trade Desk (NASDAQ: TTD): The Trade Desk has been at the forefront of AI-driven disruption in the advertising industry. The company’s platform utilizes AI and user data to efficiently match ads with potential customers, offering a more effective alternative to traditional advertising channels.
Since its initial public offering in 2016, The Trade Desk has experienced profitable growth, positioning itself advantageously within the industry. As advertising spending increasingly shifts towards digital platforms, The Trade Desk stands out for its transparency and client-centric approach compared to competitors like Meta Platforms and Alphabet.
With total worldwide ad spending estimated at $830 billion in 2023, The Trade Desk’s $9.6 billion in gross ad spending represents just over 1% of market share, indicating significant growth potential for the company.
Given its promising long-term growth prospects and profitable business model, The Trade Desk presents itself as a compelling AI investment for the future.
Tesla (NASDAQ: TSLA): Despite primarily being recognized as an automaker, Tesla boasts a diverse portfolio encompassing battery technology, solar energy solutions, and AI innovations.
Diverging from the reliance on chip companies like Nvidia, Tesla has developed its own semiconductor and robotics solutions, including the Dojo chip for powering neural networks and the FSD (full self-driving) chip for autonomous vehicles.
CEO Elon Musk’s vision includes the launch of a robotaxi business leveraging Tesla’s technology. Analysts at Cathie Wood’s Ark Invest anticipate Tesla’s revenue potentially reaching $600 billion by 2027, driven by the adoption of robotaxis.
While such projections may appear ambitious, Wood’s previous predictions have materialized, indicating the potential validity of her forecasts. Despite recent stock price fluctuations, Tesla’s low price-to-earnings ratio and anticipated earnings growth signal optimism among investors.
As Tesla continues to innovate in AI and self-driving capabilities, coupled with the upcoming release of the compact Model 2 EV, investors may find compelling opportunities in the company’s future endeavors.
In conclusion, while investors may have missed out on Nvidia’s remarkable gains, there are still numerous AI stocks offering substantial potential returns in the evolving landscape of artificial intelligence.
