The generative artificial intelligence (“AI”) landscape is rapidly evolving. With a market cap of over $2.7 trillion, Nvidia (NASDAQ:NVDA) has become the dominant player in the field, while NVDA stock has returned over 121% so far in 2024. Yet, several other generative AI stocks are also making strides on Wall Street. These companies are leveraging their technology to develop innovative solutions that could potentially challenge Nvidia’s supremacy.

Generative AI is a versatile tool that enables the rapid creation of diverse content from inputs such as text, images, and sounds. It utilizes neural networks to identify patterns and learn from unlabeled data, supporting the construction of foundational models for various AI tasks. Recent metrics suggest that by 2023, the global generative AI market could exceed $265 billion, growing at a compound annual growth rate (CAGR) of over 37.5% from 2023. Let’s now discuss three generative AI stocks that are poised to make further impact in the rest of 2024.

Advanced Micro Devices (AMD)

Semiconductor company Advanced Micro Devices (NASDAQ:AMD) is the first name among the generative AI stocks for today. It is well-known for its cutting-edge processors and graphics cards. AMD offers a range of products, including microprocessors, chipsets, graphics processing units (GPUs), and development services. It also provides server and embedded processors, semi-custom System-on-Chip (SoC) products, and technology for game consoles.

In its most recent quarterly earnings report, Advanced Micro Devices showcased robust performance, particularly in its Data Center and Client segments. The company reported a revenue of $5.5 billion, marking a 2% year-over-year (YoY) increase. This growth was primarily driven by the Data Center and Client segments, although it was partially offset by lower revenues in the Gaming and Embedded segments. Investors noted that AMD is well-positioned to capitalize on the growing demand for AI compute and data center solutions.

The company is focused on enabling AI capabilities across its product portfolio and accelerating data center growth. Meanwhile, AMD’s MI300 GPU is seeing strong demand. In fact, management projects the total addressable market (TAM) for AI compute to grow to $400 billion by 2027, highlighting the immense potential in this space

As the race for dominance in the generative AI space heats up, Advanced Micro Devices is positioning itself as a strong contender to challenge Nvidia’s supremacy. Meanwhile, AMD continues to invest heavily in research and development to stay ahead of the competition. Year-to-date (“YTD”), AMD shares have advanced about 13%. In addition, Wall Street remains optimistic, giving AMD stock a further 14% increase potential.

Microsoft (MSFT)

Next up in our list of generative AI stocks is Microsoft (NASDAQ:MSFT). The company operates in three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Many InvestorPlace readeres are familiar with Microsoft’s product offerings, which range from Office 365 to LinkedIn, Azure, and GitHub. The company also provides Windows operating systems, Surface devices, Xbox gaming consoles, and the Bing search engine.

According to the most recent quarterly metrics, Microsoft recorded revenues of $61.9 billion, up 17% year-over-year. Earnings per share (“EPS”) came in at $2.94, up 20%. Investors were pleased that Microsoft expects the next fiscal year to see double-digit revenue and operating income growth. Understandably, there will be higher capital expenditures to scale cloud and AI offerings.

Currently, Microsoft is at the forefront of generative AI innovation, with significant investments in AI-driven products and services. For example, the company has introduced Microsoft Copilot, an AI-powered assistant. The company’s Azure AI platform is widely used by businesses for various AI applications.

In addition, Microsoft’s strategic partnerships and acquisitions have further strengthened its position in the AI market. For instance, in April, Microosft and Cognizant Technology Solutions (NASDAQ:CTSH) announced a partnership. This collaboration will leverage Microsoft Copilot and Cognizant’s advisory and digital transformation services to operationalize generative AI and achieve strategic business transformation.

Wall Street has noted Microsoft role in the AI space as well as its recent advancements in generative AI. As a result, MSFT stock has returned over 10% so far in 2024. Meanwhile, the 12-month analyst forecast points to another potential 15% increase in Microsoft shares.

SAP (SAP)

Our final contender among the generative AI stocks is SAP (NYSE:SAP). With its robust portfolio of AI-enabled solutions and a strong financial foundation, this global heavyweight in enterprise application software is well-positioned to capitalize on the growing demand for generative AI technologies. The company is infusing business AI across its portfolio, enhancing user experience and operational efficiency.

SAP’s Business Technology Platform (BTP) serves as a foundation for its generative AI capabilities. Customers and partners can leverage this platform to develop and deploy AI solutions, with over dozens of use cases already in progress. This ecosystem approach not only accelerates AI adoption but also fosters collaboration and innovation.

According to the most recent quarterly earnings, Cloud revenue increased 25% to 3.9 billion euros. In addition, Cloud backlog grew 28% to 14.2 billion euros, the fastest growth on record. As a result, SAP’s operating profit came in at 1.5 billion euros, 19% higher than a year ago. Management noted that SAP has seen strong customer adoption and momentum across their portfolio, including large deals with companies like Lindt & Sprungli (OTCMKTS:LDSVF), SKF (OTCMKTS:SKFRY), and Curtiss-Wright (NYSE:CW).

We believe SAP is a formidable player in the generative AI space, leveraging its extensive experience in enterprise software and its innovative AI capabilities. The company’s strong financial performance, strategic vision, and commitment to AI integration make SAP stock a compelling long-term investment. Since January, SAP shares have gained over 18%. Finally, analysts forecast another 20% upside for SAP stock from the current level.

On the date of publication, Tezcan Gecgil held both long and short positions in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.