NVIDIA Corp. (NVDA) has been the market’s darling throughout 2023.
It’s a stock we all know, but most of us probably missed after tripling in value and earning a market cap north of $1 trillion this year.
While there’s potential for shares to escalate further, benefiting long-term investors, the nearly vertical growth trajectory witnessed since October 2022 positions the stock as a candidate for a correction.
Even if such a correction is not imminent, there are other AI stocks with more balanced valuations poised for substantial gains.
Artificial intelligence is revolutionizing operational and customer service paradigms across industries.
This transformative technology is poised to yield multiple winners in the stock market, offering lucrative opportunities for long-term investors.
In pursuit of the next Nvidia, consider adding these three AI stocks to your watchlist, as they hold promising potential in the evolving landscape of artificial intelligence…
Symbotic Inc (SYM)
Headquartered in Wilmington, Massachusetts, Symbotic (SYM) is a company that specializes in developing, commercializing, and deploying innovative, end-to-end AI technology solutions aimed at improving supply chain operations.
The company designs and installs modular inventory management systems to automate customers’ depalletizing, storage, selection, and palletization warehousing processes.
These systems have both hardware and software components, allowing them to be programmed to operate within specific customer environments.
Symbotic's systems are designed to enhance operations at the front end of the supply chain, benefiting all supply partners further down the chain.
The company has partnerships with some of the largest retail companies in the world, including Walmart (WMT) and United Natural Foods (UNFI).
Those partnerships are exactly why I think SYM is a candidate to be the next NVDA.
SYM leverages advanced AI products and software to enable clients to revolutionize their supply chain management and optimize inventory flow.
Specifically, Symbotic has helped Walmart integrate its own robotic solutions into their warehouse ecosystems.
This integration facilitates a more rapid and efficient delivery of goods, concurrently driving down operational costs.
Additionally, the compact design of Symbotic’s solutions maximizes warehouse space, allowing for enhanced inventory accommodation.
The innovative approach of Symbotic in combining AI and robotics positions the company as a transformative player in the realm of supply chain and inventory management.
SYM currently only boasts a $17.2 billion market cap compared to NVDA’s $1.04 trillion.
It wouldn’t surprise me if SYM reaches a $100 billion market cap in the next 2-3 years. That means the stock would rise 481% to roughly $180 per share.
Super Micro Computer Inc. (SMCI)
Super Micro Computer, Inc. (SMCI) is a Silicon Valley-based provider of accelerated compute platforms.
These platforms are application-optimized high-performance and high-efficiency server and storage systems.
SMCI caters to a variety of markets, including enterprise data centers, cloud computing, artificial intelligence (AI), 5G, and edge computing.
Their Total IT Solutions include complete servers, storage systems, modular blade servers, blades, workstations, full rack-scale solutions, networking devices, server sub-systems, server management, and security software.
Super Micro Computer stands at the forefront by providing AI infrastructure solutions that are pivotal for clients in developing and deploying sophisticated AI and High-Performance Computing (HPC) applications.
The servers offered by Super Micro Computer are indispensable in the realms of Artificial Intelligence and the Metaverse, serving as the backbone for executing advanced computational tasks and simulations.
I love this stock because it only trades at a P/E ratio of 22, compared to 102 for NVIDIA.
That means SMCI’s stock price is roughly five times cheaper than NVDA, relative to how much money each company generates in profit.
Super Micro Computer Inc. is only a $13.3 billion business today. If it continues on its current trajectory, I could see it also being valued north of $100 billion in the next 2-3 years.
That means the stock would experience a 652% increase to $1,885 per share.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
TSM, or Taiwan Semiconductor Manufacturing Company Limited, is the world’s largest independent manufacturer of semiconductor chips.
It plays a pivotal role in the global electronics supply chain. And quite possibly the most influential role in computer chip manufacturing in the world…
TSM operates as a pure-play foundry, manufacturing chips for various companies without designing its own devices.
It serves a broad range of industries, including computing, mobile, networking, and automotive, and its customers include major technology companies like Apple, Qualcomm, and even NVIDIA itself.
In fact, TSM has enabled roughly 85% of the world’s semiconductor startup prototypes.
I love this stock because it trades at only a 14.6 P/E ratio and provides investors with a very solid 2.2% dividend yield.
Both of these are relatively rare benefits for tech companies to offer, so investors would be wise to make this a cornerstone of their investment portfolio like NVDA.
TSM currently has a $415 billion market cap and I think it could relatively easily surpass $1 trillion in the next 2-4 years.
A $1 trillion market cap would represent a 141% return and a $204 share price for TSM.
