Missed Out on Nvidia? 2 Top Artificial Intelligence (AI) Stocks to Buy Before They Skyrocket

Perhaps no company has benefited more from the boom in generative artificial intelligence (AI) than Nvidia, which has seen its stock price rise more than 200% over the past 12 months as customers hoard its hardware to run these complex applications.

But investors don’t have to put all their eggs in one basket. Let’s discuss why Advanced Micro Devices (NASDAQ: AMD) and Super Micro Computer (NASDAQ: SMCI) could also be excellent ways to bet on the opportunity.

Advanced Micro Devices

Nvidia currently dominates the industry for AI-capable graphics processing units (GPUs), with a market share of over 80%. But with high prices and steadily growing demand, the opportunity is ripe for competition. In 2024 and beyond, AMD hopes to claim a slice of this valuable niche, potentially supercharging its long-term growth in the process.

CEO Lisa Su believes the $45 billion market for AI chips could rise to $400 billion by 2027. And her company has released its new MI300 family of GPUs designed to compete with Nvidia’s flagship H100 for training and running AI applications. Management expects the products to add around $2 billion to 2024 sales.

To be fair, that’s a modest sum compared to the $20.1 billion that AMD earned over the trailing 12 months. But the figure could rise to $20 billion in three years if the company maintains a share of just 5% (assuming Su’s prediction of a $400 billion market comes to fruition).

With a forward price-to-earnings (P/E) multiple of 48, AMD’s valuation prices in a lot of growth expectations, so the company doesn’t have much room for error. However, the unprecedented rise of AI hardware demand suggests it can meet expectations and continue outperforming.

Super Micro Computer

With shares already soaring by 67% in 2024, Super Micro Computer looks set to continue the rally that has sent its stock up fivefold in just 12 months. While the company is no longer as cheap as it was at the start of last year, it can benefit from the success of its…