Think Nvidia Stock Is Too Expensive? 1 Incredible AI Stock to Buy Instead Before It Rockets Higher.
Shares of Nvidia (NASDAQ: NVDA) have nearly tripled so far in 2023 thanks to the growing adoption of artificial intelligence (AI) applications and the semiconductor stock has become quite expensive.
Nvidia is now trading at 42 times sales and its price-to-earnings ratio stands at 227. However, the company's forward earnings multiple of 55 -- using earnings estimates -- suggests that its bottom-line growth is set to accelerate rapidly over the next year. That wouldn't be surprising, given that Nvidia's hardware is playing a central role in helping companies train AI models and also run AI inference applications.
Nvidia reportedly controls between 80% and 95% of the market for AI chips. With the demand for AI chips expected to grow at an annual rate of 29% through the end of the decade, Nvidia is in a prime position to rapidly grow its revenue and earnings in the long run. Analysts expect the company's revenue to hit $74 billion in fiscal 2026, which would be a huge jump over fiscal 2023's revenue of $27 billion. Nvidia's fiscal year ends in late January.
Source Fool.com
