Forget Nvidia: 2 Tech Stocks to Buy Instead
Technology stocks have been in impressive form on the market in the past year, recording gains of 33% as of this writing, thanks to the emergence of a major catalyst in the form of artificial intelligence (AI). Nvidia (NASDAQ: NVDA) has turned out to be one of the major beneficiaries of the proliferation of AI, with shares of the company rising an impressive 209% in the past year.
Nvidia's stunning rally is justified by the terrific growth in the company's revenue and earnings. Its revenue in fiscal 2024 (which ended in January) increased 126% year over year to $60.9 billion. Meanwhile, non-GAAP (generally accepted accounting principles) earnings were up 288% to $12.96 per share. Analysts are expecting Nvidia's top line to nearly double once again in the current fiscal year to $120 billion.
So, there is a solid chance that Nvidia could remain a top tech stock in 2024 and beyond. However, Nvidia is now trading at 77 times trailing earnings and 50 times forward earnings, higher than the U.S. technology sector's average of 47x. Nvidia's ability to sustain its healthy growth could help it justify its expensive valuation, though it won't be surprising to see savvy investors looking for cheaper tech stocks that could turn out to be winners in the future.
Source Fool.com
