Ready to invest in artificial intelligence (AI)? 2 nvidia options – Business

A broad surge of interest in artificial intelligence (AI) has been buoying the stock market for more than a year now, extending to the release of OpenAI's ChatGPT chatbot in November 2022.

Since then, some of the early leaders in AI technology have risen into the stratosphere. AI Accelerator has driven the chip NvidiaIts stock is up 410% in 16 months. Manufacturer of high-performance computer systems Super Micro Computer It grew even faster with a 1,100% gain over the same period.

I understand if you hesitate to buy shares in these skyrocketing AI stocks. What goes up doesn't necessarily come down quickly, but valuation risk is real.

Don't worry, though. There are many ways to tap into the AI ​​boom without relying on the most obvious (and perhaps overblown) market darlings.

Right now, I see deep value and exciting AI-driven growth for Google Parent over the next few years the alphabet (GOOG 0.78%) (GOOGL 0.77%) and chip manufacturers Taiwan semiconductor manufacturing (TSM -1.90%).

Taiwan Semiconductor: Delivering AI chips to a hungry world

Demand for AI-powered computing power is skyrocketing. Taiwan Semiconductor, or TSMC for short, is at the heart of this technological shift.

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In January's fourth-quarter earnings call, CEO CC Wei noted that more complex AI software requires more raw computing power, so demand for faster and more energy-efficient chips will continue to grow over time. As an industry-leading provider of advanced manufacturing technology, Wei's company is poised to benefit from this massive demand growth for years to come.

“TSMC's technology position is growing in value, and we are all well positioned to capture a major market share in terms of semiconductor components in AI,” Wei said.

Wei's analysis highlights TSMC's strategic position to make the most of the ongoing explosion in AI applications. While its stock performance has been modest, with roughly 70% growth since November 2022, TSMC's pivotal role in enabling the next wave of AI advancements suggests the stock has room to grow.

Every chip designer worth silicon wants to tap into the AI ​​craze, and TSMC is there to turn its clients' visionary AI dreams into physical chips. For example, Nvidia is one of the company's most important customers. TSMC lets you invest in a company that powers the future of technology, making it a prudent choice behind the scenes amid the AI ​​boom.

Alphabet: Time to cash in on decades of quiet AI leadership

Alphabet's commitment to integrating AI across its suite of advertising products underscores its strategic vision.

Google Parent's senior leadership is clear about AI's transformative potential. On the fourth quarter call, Chief Business Officer Philipp Schindler emphasized the company's long-standing commitment to AI-powered tools and platforms.

“AI has been at the core of our advertising products, for a very long time,” Schindler said. “And recent advancements are really allowing us to deliver more value to advertisers in a large range of different areas: bidding, targeting, creative, as well as our core advertiser and publisher experience.”

Alphabet's measured approach to AI integration should keep the company near the top of consumer-facing online services for years to come. At the same time, the stock's modest gains during AI growth suggest an undervalued upside. With the stock trading at a modest 23 times earnings over the past 16 months and barely beating the broader market, Alphabet's stock isn't getting the AI-based respect it deserves from market makers.

The company's innovation, particularly in making advanced AI tools accessible to a wider range of advertisers, positions it to facilitate the next wave of AI advancements. For investors, Alphabet is not only keeping up with the AI ​​evolution but actively leading it. The role of these companies in the digital economy may become more essential over time.

In other words, Alphabet looks like an underrated AI titan today. Don't hesitate to give this stock a serious look the next time you have some investable cash looking for a forever home.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet and Nvidia. The Motley Fool has positions on and recommends Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Super Micro Computer. Motley Fool has a revealing policy.

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