Better AI Stock: Nvidia vs. Intel

Artificial intelligence (AI) stocks were the toast of Wall Street last year. The segment was one of the biggest growth drivers in the Nasdaq Composite‘s 43% rise in 2023, with countless companies benefiting from increased interest in AI.

However, data from Grand View Research suggests the sector is just getting started. The AI market is projected to expand at a compound annual growth rate (CAGR) of 37% through 2030, which would see it exceed a $1 trillion valuation before the end of the decade. So, even stocks that reached new heights last year could still have much to offer new investors.

Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC) are two attractive options, with both companies developing the hardware necessary for training and running AI models. These companies are at considerably different stages of their AI journeys, with one dominating the industry and the other just starting out.

As a result, it’s worth asking whether it’s better to invest in an established AI stock or one with possibly more room for growth. Let’s take a look at whether Nvidia or Intel is the better AI stock this January.

Nvidia

Nvidia’s business exploded in 2023, with its stock up more than 245% since last January. The company’s years of dominance in graphics processing units (GPUs) allowed it to get a head start in AI as its chips became the preferred hardware for developers everywhere.

While chip rivals like Advanced Micro Devices and Intel have vested interests in the GPU sector, they have focused primarily on fighting over share of the central processing unit (CPU) market. This has allowed Nvidia a clear path to dominance in GPUs, perfectly positioning it to thrive amid an AI boom.

In its third quarter of fiscal 2024 (which ended October 2023), Nvidia posted revenue growth of 206% year over year, hitting over $18 billion. Meanwhile, operating income soared 1,600% to $10 billion. Much of the quarter’s growth was owed to a 279% spike in data center revenue, reflecting increased sales of AI…