Nvidia (NASDAQ: NVDA) has outperformed other artificial intelligence (AI) stocks in recent years due to its dominant position in the market. With an 80% share of the AI chip market, Nvidia has consistently achieved triple-digit revenue growth quarter after quarter, resulting in a stock price increase of over 2,200% in the past five years.
On the other hand, top technology peers such as Apple and Alphabet have seen more modest stock price gains during the same period.
While Nvidia is expected to remain a strong stock in the long term, another stock may surpass it by the end of the year. Concerns about Nvidia’s reliance on AI revenue and increasing competition in the chip market have led to a recent 12% decline in its stock price.
Investors may turn to a company benefiting from the AI boom while also generating significant revenue from other sources. This company is likely to be more resilient in uncertain economic conditions, and my prediction is that it will outperform Nvidia by the end of the year. Let’s explore further.
This stock is a household name
The stock I predict will outperform Nvidia by the end of the year is Amazon (NASDAQ: AMZN). With a thriving e-commerce business offering a wide range of products, Amazon has become a household name, driven by its Prime subscription service with over 200 million members.
Amazon reported over $121 billion in revenue in North America and internationally in the most recent quarter, showing growth in both segments year over year.
Furthermore, Amazon’s upcoming Prime Big Deal Days sales event in October is expected to attract more Prime members, boosting revenue and membership numbers.
In addition to its e-commerce business, Amazon’s cloud computing business, Amazon Web Services (AWS), which heavily focuses on AI, contributes to its growth and revenue stability.
While Nvidia has shown impressive growth, investors may turn to Amazon for its diversified revenue streams and AI involvement. Amazon’s stock is currently trading at a similar level to Nvidia, presenting a potentially safer investment option.
Although Nvidia and the AI market hold promise for the future, Amazon is likely to lead in share price performance in the short term, considering Nvidia’s recent decline.
Should you invest $1,000 in Amazon right now?
Before investing in Amazon, it’s important to note:
The Motley Fool Stock Advisor team has identified what they believe are the 10 best stocks for investors to buy now, and Amazon is not included. These stocks are expected to deliver significant returns in the coming years.
For instance, when Nvidia was recommended in 2005, a $1,000 investment would have grown to $630,099, showcasing the potential returns from stock picks.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has…
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