Unleashing the Hidden Gems
Nvidia (NASDAQ: NVDA), the titan of artificial intelligence (AI) chips, recently unveiled staggering growth figures, with revenues and net income sky-rocketing into the billions. Clocking in at over $22 billion, Nvidia’s revenue reached new heights, setting a record.
Despite a soaring 285% surge in its stock over the past year, Nvidia remains a compelling investment choice, with promising future prospects. However, discerning investors can also harness Nvidia’s meteoric rise without owning its stock. By investing in companies that seamlessly collaborate with this chip behemoth, one can unlock hidden value. Two prime candidates in this realm are leading cloud services provider Amazon (NASDAQ: AMZN) and server giant Super Micro Computer (NASDAQ: SMCI).
Wondering why this strategy could be a game-changer for your portfolio? Well, it bridges the best of both worlds: leveraging Nvidia’s growth and exposure to another top-tier business operating in diverse, compelling domains. Let’s delve deeper into each partner’s realm.
Image source: Getty Images.
Amazon’s AWS – Powering the Future
Amazon’s AWS reigns as the world’s premier cloud services provider, a propellant for the company’s overall profitability. Offering clients a comprehensive suite of cloud solutions, AWS has recently tilted towards AI, fortifying its tech infrastructure to support clients in their AI endeavors.
Investing in Amazon translates to tapping into Nvidia’s growth, as the company’s GPUs, the driving force behind AI, are integral to AWS’s offerings. AWS features a myriad of Nvidia products and services, including the Nvidia AI Enterprise platform catering to accelerated AI development. Last year, AWS and Nvidia widened their collaboration to encompass groundbreaking projects, such as crafting the world’s swiftest AI supercomputer – powered by Nvidia GPUs, naturally.
Given the extensive adoption of AWS by myriad enterprises, it’s plausible that they will adhere to this cloud services provider when seeking Nvidia’s products and services. This hints at a substantial revenue upswing awaiting Amazon in the upcoming chapters.
Furthermore, investing in Amazon’s shares unlocks the latent potential of its e-commerce domain, marked by robust growth prospects and a commendable earnings trajectory. Currently trading at 41x forward earnings estimates, Amazon emerges as a top-notch investment opportunity in the current landscape.
Super Micro Computer – Pioneering Customizable Excellence
Supermicro specializes in vending servers, storage systems, full rack scale solutions, and affiliated products. The thrill begins here: the company adopts a modular approach to constructing its wares, tailoring racks to meet clients’ specifications.
Keenly tracking Nvidia’s product evolution, Supermicro ensures that its offerings remain compatible, seamlessly integrating the latest Nvidia innovations promptly. Maintaining collaborative ties with other chip companies like Advanced Micro Devices and Intel, Supermicro positions itself to harness the growth of all major players in this domain.
In consequence, Supermicro presents customers with bespoke products powered by cutting-edge chips immediately upon their release. In the latest quarter, the company witnessed record demand for systems at rack scale, incorporating chips from Nvidia and other industry leaders.
Buoyed by its close alliance with these AI chip giants, Supermicro’s earnings have surged recently. In its 30th year of operation, the company posted its inaugural $2 billion quarter in fiscal year 2023. Presently, Supermicro forecasts a minimum 101% revenue surge to $14.3 billion in the ongoing fiscal year.
When the foremost chip manufacturers prosper, so does Supermicro, rendering the 40x forward earnings estimates valuation quite reasonable for this premier AI growth stock.
Next Move?
Rather than just riding Nvidia’s coattails through its stock, why not explore Amazon and Super Micro Computer for alternative avenues to leverage the AI giant’s pervasive growth? As Nvidia forges ahead in the AI frontier, these strategic partners offer distinct yet powerful opportunities for investors to ride the tech wave.
Unlock the synergy between Nvidia’s meteoric rise and the innovative prowess of Amazon and Supermicro to cement your position in the tech realm.
