Better AI Stocks: NVIDIA and Intel

Last year, the tech world was rocked by a boom in Artificial Intelligence (AI), and the launch of OpenAI's ChatGPT rekindled interest in the technology and underscored the extent of AI development. As a result, countless companies are turning to this emerging field to get a piece of the $200 billion pie.

According to Grand View Research, the AI market is expected to expand at a compound annual growth rate of 37% through at least 2030, valuing it at nearly $2 trillion by the end of 2030.

So it's not too late to invest in AI, and chip stocks are among the most attractive options. These companies are developing the hardware needed to train and run AI models, which suggests they will profit from the AI market tailwinds in a few years.

As a leading chip manufacturerINVISTA (NASDAQ: NVDA)respond in singingIntel (NASDAQ: INTC) The potential for AI is huge. However, the fact that these two companies are at very different stages in the AI space may mean that one of them has more room to grow in the long term.

So let's take a closer look at these chipmakers to see whether Nvidia or Intel is the better AI stock right now.

INVISTA

Nvidia's business has exploded in the last year. Its stock price has risen 2,301 TP3T since April of last year, while its quarterly revenue and operating income have soared 2,071 TP3T and 5,361 TP3T, respectively, thanks to a surge in chip sales.

In 2023, Nvidia dominates the AI graphics processing unit (GPU) market while many of its competitors are racing to catch up. nvidia's lead has allowed it to capitalize on the growth in demand for AI GPUs, accounting for approximately 90% of the market share.

Nvidia's meteoric rise has some analysts questioning how much room the company has left. However, its stock has continued to defy expectations, rising 60% in the past three months.At the same time, Nvidia's free cash flow Over the past year, it has grown by 4,30%, or more than $27 billion. This.It shows that it has enough money to continue investing in AI to maintain its market dominance.

Given the huge potential of AI and Nvidia's position in the market, I wouldn't bet against it in the long run.

Intel

Nvidia's well-established position in the AI space makes it one of the more reliable options. However, it is also worth keeping an eye on companies like Intel, whose position in the industry is precarious but has greater potential for growth.

Intel has encountered a number of obstacles in recent years. The decline in central processing unit (CPU) market share has ended with theApple Inc.After more than a decade of carrying the name, Intel's share price has declined by approximately 45% over the past three years.

However, Intel is in the process of making significant changes to its business that could lead to a strong comeback in the coming years.Last June, Intel announced a "fundamental shift" to its business, adopting an in-house foundry model that it believes will help it save $10 billion by 2025.

In addition, Intel is entering the AI space. In December 2023, the company debuted a series of AI chips, including Gaudi3, a GPU designed to challenge similar products from Nvidia. Intel also showed off its new Core Ultra processor and Xeon server chips, which include neural processing units that can run AI programs more efficiently.

Intel is on a complex path, but its financial data will take time to reflect recent changes. Therefore, investors who are patient and willing to hold onto their investment for at least 10 years are recommended to invest in Intel.

Is INVISTA or Intel a Better AI Stock?

The chart shows that Intel stock is trading at a significantly higher value than Nvidia, with a much lower forward price-to-earnings (P/E) and price-to-sales (P/S) ratio.

Forward P/E ratio is calculated by dividing the company's share price by the estimated earnings per share. Meanwhile, the P/E ratio is calculated by dividing the market capitalization by the trailing 12-month earnings. These are useful valuation metrics because they take into account the financial health of the company. For both indicators, the lower the number, the higher the value.

As a result, Intel's lower forward P/E and P/N ratios suggest that the stock is cheap compared to Nvidia. However, the question is which AI stock is better, not which stock is more valuable.

So the answer lies with the investor. If you want to invest in a mature AI company that will likely deliver consistent, but probably small, returns over many years, then Nvidia is your best bet. But if you're willing to take a chance on Intel's ability to turn things around, and the potential for a significant return on your efforts, then Intel is the AI stock to buy.

Should you invest $1,000 in INVISTA now?

Please consider this question before purchasing Nvidia stock:

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*Stock Advisory Rates as of April 8, 2024

Dani Cook does not own any of the stocks listed above. the Motley Fool holds and recommends Nvidia. the Motley Fool recommends Intel and recommends the following options: Intel January 2023 $57.50 call options long, Intel January 2025 $45 call options long, Intel May 2024 $47 call options short. the Motley Fool has a disclosure policy. the Motley Fool has a disclosure policy. The Motley Fool has a disclosure policy.

Better AI Stocks: INVISTA & Intel was originally published by The Motley Fool.