3 Stocks That Could Beat Nvidia at Its Own Game

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  • Nvidia is winning the AI chip battle but its competition isn’t far behind.
  • Intel (INTC): Gaudi 2 chips make sense for a lot of firms as reality sets in.
  • Alphabet (GOOG, GOOGL): Google TPUs weren’t the answer to Nvidia’s dominance, but they hold valuable clues.
  • Advanced Micro Devices (AMD): AMD can win market share by being ‘good enough’ thanks to their chips.

the next nvidia - 3 Stocks That Could Beat Nvidia at Its Own Game

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Without contest, Nvidia (NASDAQ:NVDA) is the best artificial intelligence (AI) stock on the current market. No matter how you slice it, Nvidia has the best chips for AI and machine learning on today’s market. And undeniably, the company has done the work to get to where it is today and deserves the accolades. 

But tremendous accomplishments and success breed competition, particularly in high-stakes realms like AI. It would be foolish to assume that Nvidia doesn’t have real competition and that its dominance is unassailable. It isn’t. Some of the biggest names in the semiconductor space aren’t far behind. Meanwhile, other tech giants are taking aim as well. 

Here are three Nvidia competitor stocks that represent companies with the potential to beat the giant at its own game.

Intel (INTC)

Close up of Intel (INTC) sign at entrance of The Intel Museum in Silicon Valley. Intel is an American multinational corporation and technology company.
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Intel (NASDAQ:INTC) has a chance to beat Nvidia in certain respects. It’s pretty well known that Nvidia’s H100 chips are the industry standard for raw AI performance. And Intel’s Gaudi 2 chips pretty much fall behind them by any benchmark. 

So as long as firms demand the absolute best AI chips Nvidia is going to continue to dominate. However, there’s reason to believe that won’t always be the case. While firms have vied to secure the absolute best AI chips during 2023, there were so many unknowns overall that securing anything but Nvidia’s leading chips was viewed as too risky.

I’d argue that isn’t as much the case as 2023 winds down and won’t be into the new year. Enterprises are better aware of what their AI needs are at this point. That’s where Intel has an advantage. Its Gaudi 2 chips are a strong competitor to H100 chips on a performance per cost basis. In other words, Gaudi 2 chips might be exactly what a lot of firms need moving forward: AI functionality at a more reasonable price. 

Alphabet (GOOG,GOOGL)

Closeup logo of Google.com website on an iPhone on wooden table. GOOG stock and Google layoffs
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Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), the corporation behind Google, is a strong competitor across tech. That shouldn’t surprise investors given its size and the vast resources the company has at its disposal. So it then also shouldn’t surprise investors to know that Alphabet believes it is competitive in the AI chip space. 

At least, that’s what the tech giant said earlier in the year. Alphabet stated that the tensor processing units (TPUs) it used to train its supercomputer is roughly 80% faster than an AI system trained on Nvidia’s A100 chips. The problem is that the A100 chip is now a legacy chip, and Nvidia released its H100 chips after that date. H100 chips are 9X faster than the A100 chip they replaced. That means that Alphabet’s TPU chips are much slower than Nvidia’s leading AI chips. 

Nevertheless, the comparison and assertion by Alphabet should raise some eyebrows. Alphabet has such vast resources at its disposal that it would surprise no one if the firm directed its attention to besting H100 chips — and actually succeeded. 

AMD (AMD) 

In this photo illustration, the AMD logo is shown on a smartphone screen.
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Machine learning is the precursor to AI, and it’s also where AMD (NASDAQ:AMD) can make up ground it has lost to Nvidia. 

Earlier this year, a test undertaken by MosaicML showed that AMD’s chips are roughly 80% as capable as Nvidia’s for machine learning purposes. Machine learning is effectively synonymous with artificial intelligence for all intents and purposes. In other words, AMD is 80% as strong as Nvidia in AI. 

Thus, the argument that favors AMD is very similar to that for Intel’s Gaudi 2 chips. As time goes on, its chips are likely to appear more and more suitable to a broader range of clients. Further, there’s always a slim chance that AMD will close the gap between itself and Nvidia. To be honest, that seems unlikely given everything that I’ve read about the skill of Nvidia’s talent base in comparison to that of AMD. Regardless, AMD can usurp market share from Nvidia by simply being ‘good enough.’ 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.


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