If investors hadn't heard of Nvidia before 2024, they probably will now, as the stock is up since the start of the year. But is it the best listed technology company to buy for the long term at current prices? Our four freelance writers think differently…
Alphabets
What it does: Alphabet owns and operates a variety of digital services, from Google to YouTube
Written by Christopher Ruane. Compared to the five-year profit Nvidia stock (2,703%), an increase of 223%. Alphabets (NASDAQ: GOOG) at that time may seem weak.
In fact, several Alphabet ratings companies have more than tripled in value within five years.
Compared to Nvidia, it benefits from having a wide range of businesses that are used every day by billions of people and corporate customers.
AI has helped turbocharge Nvidia's benchmarks. While AI presents opportunities for Alphabet too, it also creates risks. The core search business could see a drop in demand, hurting the cash cow.
But Alphabet proved its business model and profitability well before AI became a hot topic and I expect that to continue.
The company has been successful in creating disruptive products, has great products and has sticky products with huge customer bases. I see that as a long-term strength.
Revenue last year reached $300bn, while revenue totaled $74bn, two and a half times more than Nvidia's.
Christopher Ruane owns shares in Alphabet.
Raspberry Pi
What it does: Raspberry Pi makes inexpensive Linux computers perfect for control and robotics applications.
Written by Alan Oscroft. Since the IPO, i Raspberry Pi (LSE: RPI) share price showed almost no movement at all. That's a disappointing start.
It's all about artificial intelligence (AI) these days, and the robotics side of that certainly gives a lot of power to small, cheap computers designed to control applications.
Raspberry Pi computers are tiny, and just think of the computing power you can get from a dozen of those tucked away in spaces and networks. Tesla a robot, or a racing car.
Valuing a stock is so complicated that I won't attempt it. But it should be cheaper compared to the ones that go up Nasdaq shares, surely? Standardization is also a big risk. If I buy Raspberry Pi shares, I will essentially be buying blind to that effect, and hopefully.
So it would be a small purchase for me. But I might get it for my next batch of investment money.
Alan Oscroft has no position in Raspberry Pi or Tesla.
Scottish Mortgage Investment Trust
What it does: The Scottish Mortgage Investment Trust aims to identify, own and support the world's most extraordinary growth companies.
Written by Paul Summers. It's hard not to be optimistic about the long-term outlook for Nvidia stock. The problem is that market expectations are astronomically high. I think this makes it more likely that stocks will experience prolonged volatility.
I prefer to invest my hard-earned money in a fund that contains, but not too much, exposure to a chip maker.
Scottish Mortgage (LSE: SMT) wants to own the best growth stocks, many of which are technology-related. At about 10%, Nvidia is its biggest player. But if the latter tanks due to the lack of earnings estimates, the rest of its portfolio should help limit the damage. Naturally, the sale of an entire industry can be very painful.
As it has struggled for momentum in recent years, the trust trades at a discount to surplus assets. I'm not sure if this will remain the case as interest rates are lowered.
Paul Summers is a shareholder in the Scottish Mortgage Investment Trust
Volex
What it does: Volex manufactures power cords and cables, including those commonly used in data centers.
Nvidia isn't the only 'pick and shovel' stock investors can buy to capitalize on the AI revolution. While the US company offers microchips, London-listed Volex (LSE:VLX) provides cables that keep data centers running again.
The data-intensive nature of AI means that demand for high-speed Direct Attach Cables (DAC) is skyrocketing. Thanks to this new technology, revenue from Volex's Complex Industrial Technology division increased by 35.4% in the 12 months to March (to $213.4m), with sales to data centers up 131% year-on-year.
I CHECK the business is currently embarking on a five-year growth strategy to charge revenue, too. It hopes to print group revenue of $1.2bn by 2027, up from $912.8m last year. Plans include building 800 gigabit per second cables that improve energy efficiency, reduce data loss and strengthen signal integrity, all of which are important for AI applications.
Volex operates in a very competitive market. But the speed of the industry's growth — combined with the company's strong relationships with leading technology companies — still make it a top AI stock to consider, in my opinion.
Royston Wild has no shares in Volex.
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