Nvidia (NASDAQ: NVDA) recently posted impressive financial results, with both revenue and net income skyrocketing into the billions, propelled by triple-digit growth. As the premier artificial intelligence (AI) chip leader, Nvidia’s top-performing chips and related products have attracted a slew of companies, enabling the tech giant to achieve a record revenue exceeding $22 billion.
Amidst Nvidia’s stock surge of approximately 285% in the past year, its promising future prospects position it as a compelling investment option. However, investors have an alternative route to tap into Nvidia’s growth without direct ownership of the stock. By delving into companies that closely collaborate with this chip behemoth, such as leading cloud service provider Amazon (NASDAQ: AMZN) and server entity Super Micro Computer (NASDAQ: SMCI), investors can benefit from Nvidia’s growth trajectory.
So why consider this approach? By investing in Amazon and Super Micro Computer, investors gain exposure to Nvidia’s growth momentum while also leveraging opportunities in other lucrative sectors. Let’s dissect each company further.
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Exploring Amazon’s Potential
Amazon’s AWS stands as the global leader in cloud services, significantly bolstering the company’s overall profitability. AWS provides clients with a range of cloud solutions and has recently emphasized investment in AI technology infrastructure to support clients in their AI ventures.
Through Amazon’s shares, investors can ride the wave of Nvidia’s growth, as AWS integrates Nvidia’s GPUs (graphics processing units) into its offerings. AWS hosts various Nvidia products like the Nvidia AI Enterprise platform, enhancing AI development capabilities. The collaboration extension between AWS and Nvidia, aiming to revolutionize AI supercomputing, underlines the robust growth opportunities for Amazon.
Moreover, Amazon’s e-commerce division presents a high-growth segment, reinforcing its solid earnings track record. With a forward earnings estimate multiple of 41x, Amazon emerges as an attractive investment choice.
Unveiling Super Micro Computer’s Prospects
Super Micro Computer specializes in supplying servers, storage systems, and integrated solutions tailored to meet specific customer requirements. Embracing a modular approach, the company constructs products based on customers’ needs, optimizing efficiency.
Supermicro diligently tracks Nvidia’s product advancements to ensure seamless integration of Nvidia innovations into its offerings. By establishing collaborative ties with key chip manufacturers like Advanced Micro Devices and Intel, Supermicro ensures compatibility with cutting-edge chip technologies, resulting in a customized product powered by top-performing chips upon their release.
Supermicro’s alliance with AI chip giants has propelled its earnings growth, with a milestone $2 billion quarter in its 30-year history. The company foresees a robust revenue surge of at least 101% to $14.3 billion for the full fiscal year, underscoring its promising trajectory.
As the primary chip manufacturers thrive, Supermicro rides the wave, rendering its valuation of 40x forward earnings estimates quite reasonable for this burgeoning AI growth stock.
Investors contemplating a $1,000 investment in Amazon should assess potential opportunities critically. The Motley Fool Stock Advisor highlights ten stocks poised for substantial returns – with Amazon not making the current list. Investors can benefit from expert insights on portfolio construction and receive two new stock recommendations monthly, substantially surpassing S&P 500 returns since 2002.
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