News
3 tech stocks with more potential than any cryptocurrency
The cryptocurrency market has heated up over the past year as stabilizing interest rates have pushed many investors into speculative investments. But cryptocurrencies are still not for everyone; Most of the market’s top tokens are still notoriously volatile, and their prices are largely determined by supply, demand, and market hype.
So if you’re looking for growth but don’t want to roll the dice on cryptocurrencies just yet, it’s a good idea to buy some promising tech stocks with stronger underlying businesses instead. I believe these three titles are suitable for this purpose: Nvidia (NASDAQ: NVDA), Axcelis Technologies (NASDAQ: ACLS) e Pinterest (NYSE:PIN).
Image source: Getty Images.
1.Nvidia
Nvidia is the world’s largest manufacturer of discrete graphics processing units (GPUs). The chipmaker controlled 88% of the discrete desktop GPU market in the first quarter of 2024, according to Jon Peddle Research, and 97% of the AI accelerator market in 2023, according to TechInsights.
Nvidia once generated the majority of its revenue from gaming GPUs, but the market has been growing rapidly artificial intelligence (AI) market. has turned the data center business into its primary growth driver. Major AI companies love it MicrosoftOpenAI e AlphabetAll Google teams use GPUs in its data centers to process complex AI tasks. It generated 87% of its revenue from these chips last quarter.
Nvidia shares are already up 3,220% over the past five years, but they could rise even higher in two simple reasons. First, it’s still growing like a weed. Its revenue and adjusted EPS increased 126% and 288%, respectively, in fiscal 2024 (ending January 2024).
Analysts expect its revenue and adjusted EPS to rise another 98% and 109%, respectively, in fiscal 2025, as market demand for its data center chips continues to outpace available supply. Second, Nvidia stock appears reasonably valued at 47 times future earnings, so it could still generate higher earnings than most cryptocurrencies.
2. Axcelis Technologies
Axcelis ion implantation systems are used to implant ions of one element into another material. In the semiconductor market, its systems are used to insert carbon ions into silicon to produce silicon carbide (SiC), a robust material that can operate at higher voltages, temperatures and frequencies than traditional silicon chips.
The resilience of SiC chips makes them ideal for short-lived LEDs, lasers, 5G base stations, military radars and electric vehicles (EVs). Brisk EV sales initially turned the heat on Axcelis and other SiC stocks, but the bulls eventually retreated as the EV market cooled over the past two years. It has also been affected by the cyclical slowdown in the memory market, as its systems are used to produce DRAM and NAND chips, as well as adverse macroeconomic factors in China.
The story continues
That’s why Axcelis shares plunged nearly 40% after hitting an all-time high last July. But after this drop, its shares appear reasonably valued at 20 times forward earnings. Analysts expect its revenue and adjusted EPS to decline by 7% and 15%, respectively, in 2024. But in 2025, they expect its revenue and adjusted EPS to grow by 16% and 28%, respectively, as it surpasses cyclical and macroeconomic challenges.
From 2024 to 2029, the SiC industry could expand at a compound annual growth rate (CAGR) of 32.6%, according to Markets and Markets. This secular growth could send Axcelis stock to new highs by the end of the decade.
3. Pinterest
Pinterest carved out a niche in the crowded social media market with its virtual message boards, which encouraged users to curate and share their hobbies and interests with each other. Its message boards were also a natural fit for retailers, allowing them to upload their catalogs to its platform as shoppable pins with integrated payments.
Pinterest’s growth accelerated significantly during the pandemic as more people searched for online shopping ideas, recipes, DIY projects and family activities through its boards. But its expansion cooled after the pandemic ended, and its revenue rose just 9% in both 2022 and 2023. This slowdown has led many investors to dismiss it as a pandemic-era trend stock, but growth of its revenue has actually accelerated over the last five quarters.
Its monthly active users (MAU) increased 12% year-over-year to 518 million in the first quarter of 2024, marking the second consecutive quarter of double-digit MAU growth, as average revenue per user (ARPU) increased again in the last three quarters. This recovery has been fueled by its overseas expansion, new video content, AI-driven recommendations based on its curated content, new e-commerce tools, and a healthy influx of Generation Z users, who now account for more than 40 % of its MAUs.
Analysts expect Pinterest’s revenue and adjusted EPS to rise 20% and 33%, respectively, in 2024. This acceleration suggests it has plenty of room to grow — and its shares still appear reasonably valued at 30 times future earnings.
Should You Invest $1,000 in Nvidia Right Now?
Before you buy Nvidia stock, consider this:
The analyst team at Motley Fool Stock Advisor has just identified what they believe is the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia you created this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $746,217!*
Stock Advisor provides investors with an easy-to-follow model of success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks every month. The stock advisory service has more than quadrupled the return of the S&P 500 index since 2002*.
*Equity advisor will return starting June 10, 2024
Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Leo Sun has no position in any of the securities mentioned. The Motley Fool has positions and recommends Alphabet, Microsoft, Nvidia and Pinterest. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
3 tech stocks with more potential than any cryptocurrency was originally published by The Motley Fool