1 Artificial Intelligence (AI) Stock to Buy Hand Over Fist Before It Soars Like Nvidia
Nvidia's valuation has gone through the roof in 2023 thanks to a huge rally in the company's stock price. Shares of the chipmaker have shot up roughly 230% so far this year, driven primarily by the artificial intelligence (AI) arms race that has led to booming demand for its data center graphics cards that are being deployed for training AI models.
Nvidia now commands a price-to-sales (P/S) ratio of 36. Its price-to-earnings (P/E) ratio stands at a whopping 113. For comparison, Nvidia's average five-year sales and earnings multiples stand at 19 and 73, respectively, indicating just how big a premium the stock commands right now.
Those multiples may seem justified considering Nvidia's dominant position in the market for AI chips. After all, the semiconductor giant reportedly holds more than 80% of the AI chip market, according to third-party estimates. This massive market share is expected to drive the company's data center revenue to more than $31 billion in the current fiscal year. That would be more than double Nvidia's fiscal 2023 data center revenue of $15 billion.
Source Fool.com
