Nvidia (NASDAQ:NVDA) just released what was arguably its best earnings report ever. Revenues and profitability both reached historical highs, and the company bested Wall Street’s expectations. That report showed that revenues grew by 18% in Q1, reaching $26 billion. This has lead investors to start eyeing other AI stocks to buy.
The blowout report from Nvidia should serve to pull the broader AI sector higher still. Nvidia dominates the sector but there is a massive opportunity for other firms. Let’s look at three of the more AI stocks to buy following Nvidia’s latest positive news.
AMD (AMD)
AMD (NASDAQ:AMD) is the primary challenger to Nvidia in the race for artificial intelligence dominance. It’s a battle in which AMD has long been trailing. Honestly, that’s not likely to change soon. It’s clear that demand for Nvidia’s best chips is much greater than that for AMD best.
And that’s not a bad thing. AMD actually has a very comfortable position at the moment. it has established its chips as the lower priced alternative to those from Nvidia. The largest and most important chip buyers including companies like Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) have made no secret about it. They are willing to invest heavily in AMD chips despite their slightly lower performance specifications.
In other words, AMD is in the enviable position of receiving the positive benefits of enterprise frustration with Nvidia’s pricing strategies. It’s a pretty good place to be while simultaneously making efforts to best Nvidia’s AI chips.
Beyond that, Nvidia doesn’t have enough supply to meet demand, offering AMD another opportunity to prove its chips.
Micron Technology (MU)
Micron Technology (NASDAQ:MU) stock has been noted as a beneficiary of Nvidia’s bounce across headlines covering the financial world.
The memory chip provider recently forged a relationship with Nvidia that should set it up for a period of strong success. Micron Technology is one of the leading providers of high bandwidth memory (HBM) chips. Those are integral to artificial intelligence. It is a segment dominated by Korean firms SK Hynix and Samsung.
Fortunately for Micron Technology, it has forged a strong relationship with Nvidia due to its superior memory process. That has allowed the company to make significant headway as a competitor to the two Korean firms. Micron Technology’s opportunity looks to be strengthening following news that Samsung’s HBM chips are failing Nvidia’s tests.
Although Samsung refutes the claims, and Nvidia declined to comment, Sources say that Samsung has been trying to pass Nvidia’s tests since last year. Those same sources say that the most recent failure occurred in April and is just now coming to light.
Micron Technology is in prime position as a result.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) stock is bound to be both interesting and volatile in the wake of Nvidia’s blowout earnings report.
Based on price movement, it’s clear that some traders were only interested in securing gains following the earnings print. Prices jumped up on the news and then receded as profit takers sold their positions.
Investors shouldn’t take that to mean that the opportunity in Super Micro Computer is over. Remember, Super Micro Computer sells servers heavily featuring Nvidia’s GPUs. The company’s shares have soared as companies of all sizes have moved to deploy artificial intelligence at scale.
The latest news again proves that Nvidia continues to see extraordinarily high demand. That should translate to increased demand for the server packages that Super Micro Computer produces.
Don’t be surprised that investors took profits off the table on the strong news. It’s understandable. However, also be aware that the data center opportunity is extraordinarily strong, especially given that it accounted for $22.6 billion of Nvidia’s $26 billion in sales during the first quarter.
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.
