Key Points
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Nvidia has significantly benefitted from AI spending, increasing its value by over $4 trillion since October 2022, unmatched by any other company today.
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Amazon and Meta Platforms are also seeing strong results from their AI investments, with Amazon’s cloud services generating $116 billion in revenue and Meta experiencing a 22% increase in sales last quarter.
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Both companies have attractive valuations compared to Nvidia, which trades at over 42 times forward earnings.
Nvidia’s surge in value is largely driven by big tech’s spending on AI infrastructure, forecasting around $380 billion this year from the four major hyperscalers. Meanwhile, Amazon’s AWS platform, while lagging in growth at 17%, remains the largest cloud provider and has a strong operating margin of 36.8%. Meta’s investments in AI have resulted in faster revenue growth compared to its social media peers, and its advertising capabilities are also expanding due to generative AI.
Investors should consider Amazon and Meta as compelling alternatives given Nvidia’s high market valuation and the potential for these companies to exceed Nvidia’s value by 2030.
