Nvidia’s meteoric rise over the past decade has been a boon for investors seeking exposure to the world or artificial intelligence. The company’s dominance in graphics processing units (GPUs) has begged the question: what are the stocks that could be the next Nvidia?
These stocks will often have exposure to the semiconductor and AI industries. With the increasing demand for advanced computing solutions, including data centers, gaming, and machine learning models, the search for the next market leaders intensifies. As the stock market lays the foundation for the next bull cycle, these companies stand at the forefront of the race to refine modern technology.
Now, let’s unravel the up-and-coming stocks that could be the next Nvidia!
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is undoubtedly among the best of stocks that could be the next Nvidia. They are currently one of the most important chip companies in the world, and are crucial to the acceleration of AI workloads and data center connectivity.
Broadcom’s strength lies in its development of critical infrastructure components that underpin the growth of AI. The company’s data center solutions include high-speed networking chips and connectivity devices. This is what forms the backbone of computing clusters that power AI applications. Additionally, their Trident 5-X12 chip is the first ever switch with on-chip neural network. This on-chip allows for classification almost instantaneously.
The company saw record annual revenue and FCF in FY23, primarily driven by investments in network connectivity for AI hyperscalers. They achieved record adjusted EBITDA margin of 65%, while generating record FCF of $17.63 billion. Furthermore, the VMWare acquisition is set to be immediately cash flow positive. The company expects mid to high digit revenue growth in FY24, and their revolutionary AI chip could be the catalyst for multibagger returns.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) has been one of the best performing technology stocks in 2024. They are a leader in high-performance computing (HPC) systems, with the goal of building powerful, energy-efficient servers optimized for demanding AI workloads.
Super Micro’s secret sauce lies in its innovative hardware designs. The company utilizes its own motherboard designs and integrates them with the latest processors from companies like Nvidia, AMD and Intel. This approach allows for superior performance and customization. Furthermore, their next-generation liquid cooling GPUs are currently crushing their competition.
In Q2 FY24, Super Micro’s net sales more than doubled to $3.66 billion. Net income swelled to $295.97 billion, with EPS up 62% to $5.10 per share. The company has guided revenue growth in the $9.5 billion to $10.5 billion range, representing approximately $35% YOY growth. With the growing adoption of AI and demand for Super Micro’s energy-efficient servers, they remain one of the top stocks that could be the next Nvidia.
Oracle (ORCL)
Oracle (NYSE:ORCL), a household name in enterprise software, might be a top contender in the race for the next Nvidia. Their cloud infrastructure business and data center operations make them well positioned to dominate in the AI race over the next decade.
One of Oracle’s key strengths is its focus on enterprise-grade AI solutions. Unlike some consumer-facing AI platforms, Oracle caters to specific needs of large enterprises. Gen2 Cloud is growing rapidly, and the company continues to sign new large cloud infrastructure contracts. Total remaining performance obligation increased 29% YOY to over $80 billion, sitting at an all time high in Q3 FY24.
The company’s offerings integrate seamlessly with existing enterprise software solutions. Existing Oracle customers are more likely to adopt the company’s AI solutions, while already leveraging their cloud computing services. Furthermore, Oracle is rapidly expanding their data center operations to meet the growing demands of AI workloads. This is truly only the beginning, and the cloud-based future of AI remains extremely promising.
On the date of publication, Terel Miles 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.
