NVIDIA And 2 Other AI Stocks To Own

Central banks are tightening policy to fight inflation, and the bond market now offers higher yields on longer maturities. That puts a premium on companies that can grow earnings from within rather than relying on cheap capital. This article looks at three financially solid businesses selected from a screener that targets healthy balance sheets and strong earnings potential.

The three stocks highlighted below are only a sample. The wider screen surfaces 1,573 more businesses that meet the same healthy balance sheet and earnings potential criteria and offer similarly compelling narratives that are not covered here. To see the full universe and start sorting for your own highest conviction ideas, head straight into the Healthy high growth potential screener to identify, filter, and analyze candidates that fit your growth and risk preferences.

NVIDIA (NVDA)

Overview: NVIDIA builds data center scale AI computing platforms and GPUs that power artificial intelligence, cloud, gaming, automotive and professional visualization workloads worldwide.

Operations: NVIDIA generates about US$275.4b from Compute & Networking and US$27.6b from Graphics, mainly from customers in the United States and Taiwan.

Market Cap: US$5,367.2b

NVIDIA sits at the center of the Healthy high growth potential theme because its data center AI hardware and software power much of today’s training and inference demand, giving the business a direct line from AI spending to earnings over the next few years.

"Uptake of an open-source/cheaper/better platform than Nvidia's CUDA would heavily undermine Nvidia's moat and enable any sizeable firm to directly engage semiconductor manufacturers, such as TSMC, to produce their own chips, stealing away Nvidia's high margin products."

For NVIDIA shareholders, what happens if a single key assumption about who controls the crucial AI software layer starts to shift will matter.

If that control starts to shift, read the full narrative for NVIDIA to see how NVIDIA’s moat, earnings power and competitive position could be accelerating or quietly eroding.

Advanced Micro Devices (AMD)

Overview: Advanced Micro Devices designs and sells processors, graphics chips, and data center hardware that power AI, cloud, PCs, gaming, and embedded systems worldwide.

Operations: AMD currently generates about US$22.2b from Data Center, US$11.8b from Client, US$3.7b from Embedded, and US$3.6b from Gaming products.

Market Cap: US$913.9b

Advanced Micro Devices fits the Healthy high growth potential theme because its EPYC and Instinct data center lines directly tie AI infrastructure demand to earnings power, while the rest of the portfolio adds diversity rather than defining the story.

"Data Center revenue surged 57% YoY to $3.7B, powered by EPYC server CPUs and Instinct GPUs."

For AMD, what happens if a single pressure on pricing power in that AI hardware stack shifts will matter a lot for future margins.

That pricing pressure is exactly why reading the full narrative for Advanced Micro Devices can help you see where AMD’s AI story could be accelerating or quietly decoupling from expectations.

Space Exploration Technologies (SPCX)

Overview: Space Exploration Technologies runs reusable rocket launches, Starlink satellite broadband, and an AI platform that together deliver global connectivity and compute services.

Operations: SpaceX currently generates about US$13.9b from Connectivity, US$5.1b from AI, and US$4.1b from Space activities.

Market Cap: US$2,072.7b

Space Exploration Technologies fits the Healthy high growth potential theme because Starlink Connectivity links a fast-scaling subscription base with earnings potential. At the same time, rockets and AI keep the rest of the group more diversified and capital intensive.

"Another general risk for AI is an increase in U.S. interest rates due to inflation caused by high oil prices."

For SpaceX, what happens if a single funding pressure collides with heavy capital needs in rockets, satellites, and AI infrastructure will really matter.

When that funding strain meets heavy capital needs, the full narrative for Space Exploration Technologies shows where SpaceX’s AI and connectivity flywheel could still be accelerating beyond headline risk.

Seeking Fresh Alternatives Before They Fly

Fresh breakout stories rarely stay quiet for long. Momentum shifts fast, information decays, and prices move before headlines catch up. Review these under the radar ideas while it matters and consider them early in your process.

• Target steady cash generators with pricing power by scanning a curated 7 dividend fortresses that aims to pair resilience with meaningful income potential.
• Look for potential infrastructure beneficiaries through a focused 40 power grid technology and infrastructure stocks that centers on companies involved in building and upgrading the backbone of modern electricity networks.
• Identify early leaders in machine intelligence by running the curated 38 profitable AI stocks that aren't just burning cash that filters for companies with established earnings rather than speculation heavy stories.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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