Artificial intelligence (AI) stocks have been a hot topic on Wall Street, and the sector’s growth is far from slowing down. According to data from Grand View Research, the AI market is projected to grow at a compound annual growth rate (CAGR) of 37% through 2030, potentially reaching a valuation of over $1 trillion. With so much room for expansion, even companies that have already seen significant growth could still be attractive for new investors.
Nvidia and Intel are two companies worth considering when it comes to investing in AI. Both companies are involved in the development of the hardware necessary for training and running AI models. However, they are at different stages when it comes to AI.
Nvidia, with its dominance in graphics processing units (GPUs), has positioned itself as a leader in AI. Its GPUs have become the preferred hardware for developers, giving the company a clear advantage in the AI space. In the third quarter of fiscal 2024, Nvidia’s revenue grew by 206% year over year, driven by a 279% increase in data center revenue from AI GPUs.
On the other hand, Intel has faced challenges in recent years, losing market share in CPUs to competitors like AMD. However, the company has made efforts to regain its position. Intel entered the desktop GPU market in 2023 and announced new AI chips in December. Despite an 8% revenue decline in the third quarter of 2023, Intel’s operating income increased by 43% year over year.
When comparing the two companies, Nvidia seems to be the better AI stock based on its growth potential. EPS estimates suggest that Nvidia’s earnings could reach $24 per share over the next two fiscal years, while Intel’s may achieve nearly $3 per share. This translates to a projected stock price of $1,008 for Nvidia and $68 for Intel. If these projections are accurate, Nvidia’s stock could increase by 96% within two years, compared to a 42% increase for Intel.
In conclusion, Nvidia appears to be the more promising AI stock at the moment, thanks to its established position in the AI market and projected growth. However, investors should conduct thorough research and consider their own risk tolerance before making any investment decisions.
The source of the article is from the blog elektrischnederland.nl