Nvidia is a great company and a great stock, but it currently trades on slightly more than 50 times Wall Street's 2024 earnings estimates. That's fine for many investors willing to pay a premium for a high-quality growth stock, but for investors who are willing to take some near-term risk on board, ON Semiconductor (NASDAQ: ON) might be a better option. Here's why.

Semiconductors are highly cyclical; they always have been and always will be. That's because the first thing their customers do when they see demand picking up is order chips to prepare for a production ramp. Conversely, when they see a slowdown coming the first thing they do is stop or cancel chip orders as they prepare to slow production.

As such, semiconductors are always early bellwethers of their end markets. However, not all end markets are made equal, and this year, the hot area of spending has been around artificial intelligence (AI) and the high-performance computing (HPC) chips necessary to power it. That's why Nvidia has done so well and why Taiwan Semiconductor Manufacturing continues to outperform, led by a strong recovery in its HPC sales.

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Source Fool.com