The cryptocurrency market has proven its ability to drive growth for investors' portfolios. It soared to $3 trillion in market value back in 2021, and after a slump over the past couple of years, it's once again on the rise. As investors look ahead to the possibility of lower interest rates and a stronger economy, they're returning to growth investments like crypto.
But if you prefer to stick with the stock market, don't worry -- you won't miss out on major growth opportunities. In fact, certain stocks have even more potential than any crypto right now. You'll find many of them in another hot growth area: the field of artificial intelligence (AI). The AI market is forecast to surpass $1 trillion by the end of the decade, and today, investors are positioning their portfolios to benefit. Let's take a closer look at three AI stocks that could beat any crypto player.
Image source: Getty Images.
1. Nvidia
Nvidia(NASDAQ: NVDA) shares already have soared in the triple digits over the past year, but this top AI stock still may have plenty of room to run. Here's why. Nvidia is the AI chip market leader, with 80% share, and it's likely to maintain this leadership thanks to its brand strength and constant innovation.
Companies know they can count on Nvidia, making it their go-to destination, so if Nvidia can keep ahead of rivals from a technology perspective it's likely to win. For example, Tesla chief executive officer Elon Musk recently said, "There is currently nothing better than Nvidia hardware for AI." This comment was in conjunction with Nvidia's announcement of its Blackwell architecture, featuring a number of innovations including the most powerful AI chip yet.
This upcoming launch, along with Nvidia's increasing spending on research and development, are reasons to be confident about the company's earnings potential. And speaking of earnings, Nvidia's dominance so far helped it report triple-digit gains in revenue and net income last year.
All of this means the stock looks like a great buy at 34 times forward earnings estimates and has plenty of fuel to advance over time.
2. Alphabet
You probably know Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) best thanks to its biggest revenue driver: Google Search. Advertisers pay to promote their products or services across the search platform, knowing they can easily reach their audience there. After all, Google Search consistently holds more than 90% of the global search market.
Thanks to AI, Google Search is likely to get better and better -- and AI tools are making the advertising experience easier for advertisers too. Alphabet recently launched its most powerful AI model yet, Gemini 1.5, and is applying the technology across its business. In search, generative AI is offering users faster results and access to more information on a specific topic. This should keep users coming back, and as a result, advertisers are likely to keep spending on Google Search ads.
Alphabet also could become an AI winner through its cloud business. Google Cloud offers clients access to AI chips and other products and services to power their AI projects. Just last year, it announced thousands of product advancements thanks to AI, and all of this helped Google Cloud win or expand deals with major companies including McDonald's and Verizon.
Right now, Alphabet stock trades for 23 times forward earnings estimates, a terrific entry point for this solid long-term player.
3. Meta Platforms
Meta Platforms(NASDAQ: META) is another company that generates most of its revenue through advertising. Advertisers flock to Meta's social media platforms -- Facebook, Messenger, WhatsApp, and Instagram -- because they know that's where they can reach us. More than 3.1 billion people use at least one of Meta's social media apps every day.
This has offered Meta a growing stream of revenue, which has led to profit too. Now, Meta is going all in on AI, with the plan of using this technology across all of its products and services well into the future. Meta's made AI its investment focus, with the goal of having 600,000 graphics processing units on board by the end of the year.
Meta already has developed its own large language model (LLM), Llama, and is now training Llama 3. This serves as the foundation for products such as new conversational assistant Meta AI -- and thanks to Meta's open-source policy, its software could even become an industry standard.
This tech giant has huge AI ambitions, and if it even reaches only some of its goals, it could be a major AI winner -- that's why it looks like a top bargain now at 24 times forward earnings estimates.
Should you invest $1,000 in Nvidia right now?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Tesla. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, and Tesla. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
