Tech
2 Tech Stocks With More Potential Than Any Cryptocurrency
These companies have lucrative positions in the technology sector, which could drive their stock prices higher than any cryptocurrency.
The Global Cryptocurrency Market Is Worth $2.4 Trillion. Top Performers Bitcoin AND Ethereal have delivered gains of 100% and 68% over the past 12 months, as easing inflation has revived less stable investments. However, cryptocurrencies remain a riskier investment than most stocks, as they are known for their volatility and prices that can rise and fall based on the whim of something as simple as a social media post.
The decentralized nature of cryptocurrencies makes them easy to use, allowing transactions around the world with minimal fees. However, it can also mean that without tangible ties to an organization, there may be little logic or reason for price fluctuations.
As a result, investors looking to grow their portfolio with less risk may want to consider technology stocks. Technology is an ever-expanding market that benefits from the constant demand for updated software and hardware products. As a result, investing in companies with solid business models and market penetration can generate significant growth in the long term.
Here are two tech stocks with more potential than any cryptocurrency.
1. Intel
You might be surprised to see Intel (INTC -0.09%) on this list, with its shares down 39% since 2021. The company doesn’t exactly have a reputation for outperforming cryptocurrencies. However, Intel is changing things up and is active in areas that could help it see its stock price skyrocket in the coming years.
Intel shares have jumped 13% in the past month as investors seem to have taken notice of the recent restructuring. The company announced a “fundamental shift” in its operations in 2023 that would see it fully expand into the foundry market by building chip factories across North America.
According to Allied Market Research, the semiconductor foundry market was estimated to be worth $107 billion in 2022 and is expected to double to $232 billion by 2032. Demand for chips has skyrocketed in recent years as advances in various technology sectors require more powerful hardware to take their designs to the next level.
From the beginning of 2023, artificial intelligence (AI) has become a key growth driver for chip sales, with graphics processing unit (GPU) needed to develop generative software. As a result, Intel has set its sights on becoming a leading AI chipmaker, allowing it to capitalize on growing demand across the industry. With chip giants like Nvidia (NVDA -0.62%) and Advanced Micro Devices By outsourcing much of its manufacturing, Intel is positioning itself as the go-to chipmaker in the United States.
The AI market is expanding at a compound annual growth rate of about 37%, on track to reach nearly $2 trillion in spending by 2030. Demand for chips is likely to continue to grow over that period, suggesting that Intel is far from reaching its ceiling.
Data from Y-Charts
Additionally, two key metrics indicate that Intel is trading at a value, which could also attract new investors. The company price/earnings ratio AND price/sales ratio are below their 12-month averages. The company is investing heavily in some of the world’s most profitable sectors, which could allow its shares to outperform the cryptocurrency market over the next decade.
2. Nvidia
Nvidia’s stock has been rising faster than Bitcoin and Ethereum for at least five years. Meanwhile, the company’s powerful position in technology suggests it will likely continue to beat the cryptocurrency market long into the future.
Data from Y-Charts
Before 2023, Nvidia was best known for its dominance in gaming. The chipmaker accounts for 88% of the discrete desktop GPU market, up from 65% over the past 10 years. The company’s chips have become the go-to option for gamers around the world, who use GPUs to build high-powered gaming computers.
Nvidia’s success in the market has allowed it to expand into many other technology sectors, from portable gaming consoles to laptops, cloud platforms and, most importantly, artificial intelligence. The tech giant has reinvented itself as one of the biggest threats in artificial intelligence, as its AI GPUs have become the gold standard. Nvidia now boasts a lucrative list of prominent customers, with Microsoftdeveloper of ChatGPT OpenAI and AlphabetGoogle Cloud uses all of its own chips.
Nvidia’s success in AI has seen its quarterly revenue and operating income soar 93% and 149% over the past year. Meanwhile, its free cash flow rose 281% to $39 billion. By comparison, Nvidia rival AMD’s free cash flow has reached just over $1 billion this year. So, in addition to its dominant market share, Nvidia is better positioned financially to continue investing in its technology and widen its lead in artificial intelligence.
Nvidia’s enormous growth potential means that even with a future price/earnings ratio of 47, its shares are a buy and a better option than any cryptocurrency.
Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Advanced Micro Devices, Alphabet, Bitcoin, Ethereum, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 call on Intel, long January 2026 $395 call on Microsoft, short August 2024 $35 call on Intel, and short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.