As cryptocurrency prices surge amid optimism for a crypto-friendly Trump administration, investors may be tempted to chase the volatile gains in digital assets. However, tech stocks like Nvidia (NASDAQ: NVDA), AppLovin (NASDAQ: APP), and Taiwan Semiconductor (NYSE: TSM) offer compelling growth potential with a more stable trajectory. Here’s why these three companies stand out as smart alternatives to crypto.
1. Nvidia: The AI Processor Titan
Nvidia has become synonymous with artificial intelligence (AI) dominance. The company’s graphics processing units (GPUs) power 70% to 95% of AI data centers, cementing its position as the industry leader.
In the third quarter (ended Oct. 27), Nvidia reported 94% sales growth to $35.1 billion and a 119% increase in non-GAAP earnings per share (EPS) to $0.81. Nvidia CEO Jensen Huang projects up to $2 trillion in AI data center spending over the next five years, positioning Nvidia to capture a significant share of this explosive growth.
Investors should note Nvidia’s forward price-to-earnings (P/E) ratio of 32.6, which is a premium compared to the S&P 500’s P/E ratio of around 24. However, this valuation reflects the company’s unparalleled growth potential in AI.
2. AppLovin: Revolutionizing Ad Tech with AI
AppLovin is an adtech powerhouse leveraging AI to optimize ad placements across connected TVs and mobile apps. The company is riding the wave of a $1 trillion advertising market that continues to expand.
In its third quarter (ended Sept. 3), AppLovin achieved 39% revenue growth to $1.2 billion and an impressive 317% EPS increase to $1.25. With global ad spending expected to grow by 7.7% in 2025 and programmatic ads predicted to make up 81% of digital advertising by 2028, AppLovin is strategically positioned for continued success.
Despite its hefty forward P/E ratio of 47.6, AppLovin’s potential to capitalize on the booming advertising market makes it an attractive investment for growth-focused investors.
3. Taiwan Semiconductor: AI’s Manufacturing Backbone
As the world’s leading manufacturer of advanced processors, Taiwan Semiconductor (TSMC) controls a staggering 90% of the high-end chip market. This dominance is vital as companies accelerate AI spending, with projections reaching $1 trillion in the near term, according to Goldman Sachs.
TSMC’s third-quarter results (ended Sept. 30) showcased 39% revenue growth to $23.5 billion and a 54% increase in EPS to $1.94 per American depositary receipt (ADR). With its cutting-edge 3-nanometer chips and plans for 2nm technology by 2025, TSMC is a critical player in the AI revolution.
TSMC’s forward P/E ratio of 22.9 makes it relatively affordable compared to Nvidia and AppLovin, offering a balance of growth and value.
Why Tech Beats Crypto
While cryptocurrencies can deliver eye-popping gains, their extreme volatility and speculative nature pose significant risks. In contrast, Nvidia, AppLovin, and TSMC tap into the rapidly expanding AI market with proven business models and established leadership.
These tech stocks may not offer the same meteoric returns as crypto during a bull run, but they provide long-term growth potential with far less risk. For investors seeking sustainable gains, these three companies are worth serious consideration.
This story was originally featured on Finance.Yahoo.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
