July 20, 2024

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Better Artificial Intelligence Stock: Nvidia vs. Amazon

2 min read

Whether you’re a casual investor or trade professionally, you’re likely aware of the boom in the artificial intelligence (AI) market that has captivated Wall Street over the last year. The launch of OpenAI’s ChatGPT toward the end of 2022 reinvigorated the industry and led countless companies to pivot their businesses toward AI.

Excitement over the generative technology has led to companies across tech enjoying significant stock growth. Notable are Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN), which have seen their share prices soar 222% and 45%, respectively, since last June. These companies have achieved powerful positions in AI, with one leading the chip market and the other excelling in software.

Despite recent growth, these companies likely still have much more to offer new investors, with the AI market projected to expand at a compound annual growth rate of 37% until at least 2030.

So, let’s take a closer look at these tech giants and determine whether Nvidia or Amazon is the better stock to invest in AI this June.

Nvidia

After soaring growth over the last year, Nvidia introduced a 10-for-1 stock split on June 10. The split has lowered its price per share, making now an attractive time to buy — and multiple analysts seem to agree.

Argus Research and Oppenheimer recently increased their price targets from $110 per share to $150, maintaining a buy rating. Meanwhile, Evercore ISI raised its target to $145 from $131, expressing a similar sentiment.

Despite delivering record gains, Nvidia’s powerful position in AI and tech in general indicates it’s still nowhere near hitting its ceiling. The company maintains an estimated 90% market share in AI graphics processing units (GPUs) — the chips necessary to train AI models. Meanwhile, chip demand is expected to rise for the foreseeable future as the AI market develops.

Moreover, Nvidia is keeping up with the demand for powerful hardware and retaining its lead among competitors by making a change to its product release…



2024-06-19 04:45:00

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