2 Top AI Stocks to Buy Before It Does

2023 was a year of recovery for the tech-heavy Nasdaq Composite, which jumped 43% amid the easing of inflation and other macroeconomic challenges that hurt stocks in 2022. But if history is anything to go by, the rally could be just getting started. According to an analysis of data going back to 1971, the index has surged by an average of 19% every year following a bear-market rebound like the one we experienced in 2023.

Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN) could make great ways to bet on this pattern repeating itself in 2024 and beyond — especially as both companies develop their new growth strategies around artificial intelligence (AI) technology.

1. Nvidia

With shares up 236% over the last 12 months, Nvidia was one of the Nasdaq’s biggest winners in 2023 — helping drive the index’s recovery after its slump in 2022. The tech giant is riding a wave of demand for its data center chips for large language models — the technology behind AI chatbots. And with these applications becoming increasingly demanding, Nvidia’s boom might be just getting started.

While 2023 was a breakout year for AI, the technology is still in its nascent stage. As an article in Time noted, the rate at which AI is surpassing humans at various tasks is accelerating, which could unlock new and increasingly complex use cases. Nvidia is at the forefront of this trend because of its industry-leading chips like the H100, sales of which helped power its 206% year-over-year revenue jump to $18.12 billion in the third quarter.

To be fair, Nvidia is not the only game in town. Rival Advanced Micro Devices is racing to capture a slice of the opportunity with new AI chips of its own. But with industry experts projecting the market for that hardware to grow tenfold to $400 billion by 2027, there seems to be plenty of room for more players to get involved without significantly eroding Nvidia’s revenue growth and margins.

The company’s forward price-to-earnings…