Nvidia’s Alternatives: Investment Opportunities in AI
Nvidia (NASDAQ: NVDA) is expected to remain a strong investment through 2026, driven by robust AI demand. However, diversification in the AI sector is encouraged for investors. Key alternative stocks include Taiwan Semiconductor (NYSE: TSM), Broadcom (NASDAQ: AVGO), and AMD (NASDAQ: AMD).
Key Data Points
Taiwan Semiconductor, the world’s largest chip foundry, forecasts a nearly 60% compounded annual growth rate (CAGR) for AI chips between 2024 and 2029, with a projected 30% growth for 2026. It trades at 23.4 times forward earnings, comparable to the S&P 500’s 22.2 times.
Broadcom reported AI semiconductor revenue of $6.5 billion in Q4 2023, increasing 74% year-over-year, and expects $8.2 billion in AI revenue for Q1 2024, marking a 100% increase. AI now accounts for 36% of total revenue, projected to rise to 43% next quarter. AMD aims for a 60% CAGR in its data center division through 2030, positioning itself as a cost-effective option amidst tightening resources.
