Ditch Nvidia: Explore 2 AI Stocks Set to Boost Your Wealth in 2024

byAdmin •January 21, 2024

11

Title: Exploring AI Investment Opportunities Beyond Nvidia: Alphabet and Meta Platforms In the surge of 2023's artificial intelligence (AI) boom, Nvidia, supplying 80% of the vital training chips, emerged as a major winner. However, savvy investors are now considering diversifying their portfolios to tap into various facets of the long-term AI opportunity. Let's delve into why Alphabet and Meta Platforms could be valuable additions to your investment strategy in 2024 and beyond. **1. Alphabet** With an impressive market cap of $1.79 trillion, Alphabet ranks as the fourth-largest company globally, signaling substantial momentum for continued growth. The incorporation of AI infrastructure into its cloud-computing platform positions Alphabet for diversification and sustained expansion. While Nvidia focuses on the foundational aspects of AI, Alphabet, particularly through Google Cloud, aims for a comprehensive approach, catering to enterprise clients' data management and AI training needs. Google's platform boasts a significant advantage, with CEO Sundar Pichai revealing that 70% of generative AI start-up unicorns utilize Google's infrastructure. This strong endorsement underscores the platform's quality and competitive pricing. Google plans to enhance its standing with proprietary AI chips known as tensor processing units, offering cost efficiencies through vertical integration and reducing reliance on external suppliers like Nvidia. Investors also benefit from Alphabet's appealing valuation, with a forward price-to-earnings (P/E) multiple of 22, significantly lower than the NASDAQ 100's estimate of 29. **2. Meta Platforms** Meta Platforms, experiencing a remarkable 174% surge in share price in the last 12 months, has drawn attention following the introduction of ChatGPT in late 2022. The company's strategic shift from metaverse development to a stronger focus on generative AI has fueled optimism among investors. Meta Platforms possesses inherent advantages in its AI endeavors due to its longstanding business model centered around gathering and monetizing extensive data. The integration of generative AI, specifically large language models (LLMs), enhances the company's capabilities in content creation based on trained datasets. Beyond the technicalities, Meta is implementing conversational AI experiences across its popular apps, introducing features like responsive image editing on Instagram and distinctive personality chatbots on WhatsApp. Although these efforts might not yield immediate operational impacts, they contribute to sustained user engagement and valuable customer data. Operational performance indicators also reflect positivity for Meta, with third-quarter (2023) revenue surging by 23% year over year to $34.15 billion, accompanied by a 164% increase in net income to $11.58 billion. The forward P/E of 22 positions Meta Platforms as an attractive prospect for investors looking to tap into the company's long-term potential. As the AI landscape becomes increasingly competitive in 2024 and beyond, focusing on companies with robust economic moats becomes crucial. Alphabet and Meta Platforms, boasting extensive user data for training and refining AI models, emerge as promising candidates for sustained market-beating growth.

In the surge of 2023's artificial intelligence (AI) boom, Nvidia, supplying 80% of the vital training chips, emerged as a major winner. However, savvy investors are now considering diversifying their portfolios to tap into various facets of the long-term AI opportunity. Let's delve into why Alphabet and Meta Platforms could be valuable additions to your investment strategy in 2024 and beyond.

**1. Alphabet**

With an impressive market cap of $1.79 trillion, Alphabet ranks as the fourth-largest company globally, signaling substantial momentum for continued growth. The incorporation of AI infrastructure into its cloud-computing platform positions Alphabet for diversification and sustained expansion.

While Nvidia focuses on the foundational aspects of AI, Alphabet, particularly through Google Cloud, aims for a comprehensive approach, catering to enterprise clients' data management and AI training needs. Google's platform boasts a significant advantage, with CEO Sundar Pichai revealing that 70% of generative AI start-up unicorns utilize Google's infrastructure. This strong endorsement underscores the platform's quality and competitive pricing.

Google plans to enhance its standing with proprietary AI chips known as tensor processing units, offering cost efficiencies through vertical integration and reducing reliance on external suppliers like Nvidia. Investors also benefit from Alphabet's appealing valuation, with a forward price-to-earnings (P/E) multiple of 22, significantly lower than the NASDAQ 100's estimate of 29.

**2. Meta Platforms**

Meta Platforms, experiencing a remarkable 174% surge in share price in the last 12 months, has drawn attention following the introduction of ChatGPT in late 2022. The company's strategic shift from metaverse development to a stronger focus on generative AI has fueled optimism among investors.

Meta Platforms possesses inherent advantages in its AI endeavors due to its longstanding business model centered around gathering and monetizing extensive data. The integration of generative AI, specifically large language models (LLMs), enhances the company's capabilities in content creation based on trained datasets.

Beyond the technicalities, Meta is implementing conversational AI experiences across its popular apps, introducing features like responsive image editing on Instagram and distinctive personality chatbots on WhatsApp. Although these efforts might not yield immediate operational impacts, they contribute to sustained user engagement and valuable customer data.

Operational performance indicators also reflect positivity for Meta, with third-quarter (2023) revenue surging by 23% year over year to $34.15 billion, accompanied by a 164% increase in net income to $11.58 billion. The forward P/E of 22 positions Meta Platforms as an attractive prospect for investors looking to tap into the company's long-term potential.

As the AI landscape becomes increasingly competitive in 2024 and beyond, focusing on companies with robust economic moats becomes crucial. Alphabet and Meta Platforms, boasting extensive user data for training and refining AI models, emerge as promising candidates for sustained market-beating growth.

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