Janice R. Andrews
Over the past year, there have been substantial swings in the cryptocurrency market, and as interest rates have stabilized, more investors are turning to riskier assets. But it may be intimidating due to the erratic nature of cryptocurrencies, whose values are mostly determined by market excitement, supply, and demand. Good tech firms with strong underlying businesses are a safer choice for investors looking for growth without the volatility of cryptocurrencies. Nvidia (NASDAQ: NVDA), Axcelis Technologies (NASDAQ: ACLS), and Pinterest (NYSE: PINS) are three notable tech stocks.
1. Nvidia: Pioneering the Revolution in AI
The leading manufacturer of discrete graphics processing units (GPUs) in the world, Nvidia, had 88% of the market for desktop GPUs in the first quarter of 2024 and 97% of the market for AI accelerators in 2023. Nvidia, which was once well-known for its gaming GPUs, has changed its business strategy to take advantage of the expanding artificial intelligence (AI) sector. For sophisticated AI activities, major AI businesses like Microsoft, OpenAI, and Alphabet’s Google rely on Nvidia’s data center GPUs.
The financial results of Nvidia demonstrate this change in strategy. The corporation had a 126% and 288% increase in sales and adjusted EPS in the fiscal year 2024, respectively. Due in large part to the continuous demand for its data center chips, analysts predict that in fiscal 2025, the company’s sales and adjusted EPS would increase by an additional 98% and 109%, respectively. Nvidia’s stock has increased 3,220% in the last five years, but it is still reasonably priced at 47 times future profits, which puts it in a position to rise even faster than other cryptocurrencies.
2. The Semiconductor Industry Is Driven by Axcelis Technologies
Ion implantation systems, which are essential for creating silicon carbide (SiC) chips, are the area of expertise for Axcelis Technologies. These chips are vital for many applications, including as LEDs, lasers, 5G base stations, military radars, and electric vehicles (EVs). They are renowned for their durability and capacity to function at high voltages, temperatures, and frequencies.
Although Axcelis has been hurt by the cooling EV industry and a cyclical downturn in the memory business, the company’s long-term prospects are still quite good. From 2024 to 2029, the SiC sector is projected to expand at a compound annual growth rate (CAGR) of 32.6%. Trading at a modest 20 times projected profits, Axcelis is expected to rebound in 2025 with a 28% increase in adjusted EPS and a 16% increase in revenue. The stock of Axcelis might reach all-time highs because to this projected increase.
3. Pinterest: A Social Media Trailblazer with the Potential for E-Commerce
Because it allows users to share interests and hobbies on virtual pinboards, Pinterest has made a distinctive place for itself in the social media sphere. Retailers find this platform especially appealing since it allows them to submit catalogs as shoppable pins with integrated payments. After the epidemic, Pinterest’s development halted, but it has made a remarkable rebound.
A rise in Gen Z users, more video content, AI-driven recommendations, improved e-commerce features, and foreign development were the main drivers of Pinterest’s 12% year-over-year increase in monthly active users (MAUs) to 518 million in Q1 2024. Analysts’ projections for 2024 show considerable growth potential, with a 20% increase in sales and a 33% increase in adjusted EPS. Pinterest’s stock is worth thirty times its projected earnings, making it a compelling investment opportunity.
Although some investors still find cryptocurrencies appealing, they are a dangerous investment due to their inherent volatility. Conversely, tech firms with strong business fundamentals and great growth potential include Nvidia, Axcelis Technologies, and Pinterest. These equities have the potential to yield significant long-term gains in addition to offering a safer choice for investors.
