Beyond Nvidia: Hidden AI Stock Gems Await!

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Feeling a little jittery about Nvidia’s price tag? 😬
You're not alone.

While Nvidia has been on a roll, climbing over 150% in 2024 alone, its sky-high valuation might make some investors hesitate.

If you're looking for alternatives that are still riding the AI wave but come with a lower price tag, you're in the right place.

Nvidia’s artificial intelligence (AI) chips are in massive demand, and its future looks bright with new Blackwell processors already seeing more demand than supply.

But let’s be real—at 59 times earnings, Nvidia’s stock isn’t exactly a bargain.

For those of you with a lower risk appetite, I’ve got two names you should definitely consider.

Let’s dive in!

1. Micron Technology: Riding the AI Memory Wave

Micron Technology (MU) is a name to watch in the AI space.

Why?

They supply the high-bandwidth memory (HBM) that powers Nvidia’s AI chips.

So, while Nvidia is grabbing headlines, Micron is quietly cashing in.

Micron’s fourth-quarter revenue shot up by an impressive 93% year-over-year, reaching $7.75 billion.

Not bad, right?

And the good news keeps coming.

They expect to pull in $8.7 billion next quarter, an 84% jump from the previous year.

But wait, there's more!

Micron isn’t just about memory for data centers.

They’re making moves in smartphones and PCs too, especially with AI-enabled gadgets that demand more memory than ever before.

Micron CEO Sanjay Mehrotra mentioned that AI-enabled smartphones now carry up to 16GB of memory, double what top-tier phones had last year.

Even PCs are stepping up, with some sporting up to 64GB of memory.

The AI boom isn’t slowing down either.

Generative AI devices are predicted to grow at an eye-popping 78% annually through 2028, while AI-powered PCs are forecasted to rise by 44% yearly.

With the HBM market set to explode from $4 billion in 2023 to $25 billion by 2025, Micron is primed for serious growth.

So, if Nvidia’s price is too steep for your liking, Micron is a solid bet.

2. Taiwan Semiconductor Manufacturing: The Backbone of AI Chips

You might not have heard of Taiwan Semiconductor Manufacturing (TSMC), but trust me, they’re a big deal.

TSMC is the go-to chip manufacturer for big names like Nvidia, and they’re a key player behind Nvidia’s AI chip success.

For example, Nvidia’s A100 GPU, which helped train ChatGPT, was built using TSMC’s 7-nanometer process.

The H100, another AI superstar chip, is made with TSMC’s even more advanced 4nm process.

The demand for TSMC’s advanced chip production is through the roof, with their capacity booked solid through 2025.

They’re working hard to scale up production, with plans to more than triple their monthly packaging capacity by the end of 2024.

And with major clients like Nvidia and Apple, TSMC’s growth prospects are looking sharp.

TSMC is expected to boost earnings by over 20% in 2025 and 2026, making it a steal at its current valuation of 22 times forward earnings.

If TSMC hits its projected earnings of $10.35 per share by 2026 and trades at 30 times earnings (in line with the Nasdaq-100), the stock could rise 72% from today’s levels.

That’s a compelling case to buy while it’s still attractively priced.

But Wait, What About AMD?

Let’s not forget Advanced Micro Devices (AMD).

The company recently had its Advancing AI conference, where it launched new products like the Ryzen AI Pro 300 series, designed to supercharge AI applications.

AMD’s new EPYC data center CPUs and Instinct MI325x AI GPUs are also making waves, beating Nvidia’s H200 HGX in some performance metrics.

While AMD’s stock took a 4% dip after the conference, it’s likely just a case of "buy the rumor, sell the news."

Despite the pullback, AMD is solidly positioned to grow its share in the AI data center market, making it another option to keep on your radar.

Conclusion: Your Move

So, while Nvidia is clearly a top player in the AI world, Micron, TSMC, and AMD offer intriguing alternatives—especially for investors who prefer not to chase high valuations.

Which stock catches your eye the most? 🤔

Are you ready to make your next move in the AI semiconductor market?

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