SA asks: What is a good alternative to Nvidia? (NASDAQ:NVDA)

from Nvidia (NASDAQ:NVDA) The stock has soared 154% this year, its performance largely fueled by seemingly insatiable demand for its GPU chips amid the proliferation of AI technology.

But Nvidia isn’t necessarily the only way to profit from the chip. feeding frenzy. Which brings us to today’s investment question from SA Asks: What is a good alternative to Nvidia?

We asked South African analysts Jonathan Weber, Michael Del Monte, Uttam Dey and Jere Wang of JR Research for their picks.

Jonathan Weber: I think Taiwan Semiconductor Manufacturing Company (TSM) is a great alternative. It has a great market position, strong growth, and benefits from Nvidia’s momentum as a Nvidia manufacturer. It is also significantly cheaper than Nvidia.

Michel Del Monte: There are a few ways to play the trade. I prefer to go down one level to Oracle (ORCL), Dell (DELL), and Hewlett Packard Enterprise (HPE) as buyers of GPUs for server construction and, therefore, for building AI factories. Premiums remain relatively low, offering some upside potential from a valuation perspective.

Uttam Dey: Advanced Micro Devices (AMD) has been rolling up its sleeves in two key markets it sells into: data center GPUs and PCs. On the data center front, it should regain single-digit market share, supported by an impressive product roadmap that is now moving to an annual release cycle to match NVDA. The PC and appliance market should also see marginal growth. With revenue expected to grow by more than 15% and earnings expected to exceed that figure, AMD could easily see double-digit stock growth.

Jere Wang of JR Research: Nvidia is benefiting from the growth of AI data center infrastructure. It is by far the market leader. However, AMD’s AI business is expected to exceed $4 billion this year, compared to almost nothing last year. I think AMD could be seen as an alternative to tapping into the AI ​​goldmine.

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