Many of the top cryptocurrencies on the market have soared over the past 12 months. Bitcoin's (Crypto: Bitcoin) The price rose more than 180% as the first exchange-traded funds (ETFs) were approved at spot prices, and investors looked forward to the next “halving” that will halve Bitcoin mining rewards in April this year. Ethereum's (Crypto: ETH) The price also jumped almost 130%, as Dencun's big upgrade to the Ethereum Network and hopes of new ETF approvals sent the bulls back.
Expectations of stable or low interest rates have also pushed more investors back towards cryptocurrencies. This shift may herald the end of the “crypto winter” that began in 2022, but cryptocurrencies are still riskier than most tech stocks — since they trade solely on supply and demand rather than the growth of the underlying business.
So, if you're looking for growth but can't handle extreme volatility in the cryptocurrency market, you can buy some high-growth tech stocks, which may still have more upside potential than the top cryptocurrencies. I believe Nvidia (Nasdaq: NVDA), Super micro computer (Nasdaq: SMCI)And ASML (NASDAQ: ASML) Check all the correct boxes. Let's find out more about these three technology stocks with great potential.
1. Nvidia
Nvidia became the third most valuable company in the world in early March. Its market value has reached $2.2 trillion, as the explosive growth of the artificial intelligence (AI) market has led more companies to purchase their own data center GPUs to process their AI tasks.
Nvidia generated 78% of its revenue from its data center GPUs in fiscal 2024 (which ended in January), significantly reducing its reliance on gaming and professional GPUs for the PC market. The expansion of this work has been driven by the growing popularity of generative AI platforms such as ChatGPT from OpenAI.
Nvidia's revenue and adjusted earnings per share (EPS) rose 126% and 288%, respectively, in fiscal 2024 as the AI market grows. Analysts expect its revenue and adjusted EPS to rise 81% and 89%, respectively, in fiscal 2025. Based on those bullish forecasts, Nvidia stock doesn't look expensive at 36 times forward earnings.
2. Super micro computer
Supermicro (as the company is known) produces high-performance servers for data centers. It controls a smaller segment of the enterprise server market Hewlett-Packard Company And Dalebut its close relationship with Nvidia gives it access to the chipmaker's top-tier data center GPUs ahead of its larger rivals.
This partnership has enabled Supermicro to carve out a niche in the fast-growing market for dedicated AI servers. That's why its revenue and adjusted EPS rose 37% and 109%, respectively, in fiscal 2023 (which ended last June). Analysts expect its revenue and adjusted EPS to rise 104% and 86%, respectively, in fiscal 2024.
These are impressive growth rates for a stock that trades at 34 times forward earnings. It is also working on developing artificial intelligence servers that are used Advanced micro devicesNew AI-oriented GPUs – a shift that should reduce their long-term dependence on Nvidia.
3. ASML
ASML is the world's largest producer of lithography systems for optically engraving circuit patterns on silicon wafers. It is also the only manufacturer of extreme ultraviolet (EUV) lithography systems – preferred by leading foundries Taiwan Semiconductor Manufacturing Co., Ltd Using them to manufacture their smaller, denser, more energy-efficient chips.
Like many other chipmakers, Nvidia outsources its manufacturing to TSMC — but TSMC can't produce those cutting-edge chips without ASML hardware. That's why ASML is an indispensable pillar of the global semiconductor industry. This reputation, coupled with its lack of meaningful competitors, gives it unparalleled pricing power.
ASML's revenue and EPS rose 30% and 41%, respectively, in 2023. But in 2024, analysts expect its revenue to rise less than 1% with EPS to decline 4%. This slowdown will result from stricter export restrictions on its shipments to Chinese chipmakers and excess inventory of chips in the computer and smartphone markets. However, it expects its growth to accelerate again in 2025 as it overcomes those challenges – so I think its shares deserve a higher valuation of up to 43 times forward earnings.
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Leo Sun has positions at ASML. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Bitcoin, Ethereum, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
3 Tech Stocks With Bigger Potential Than Any Cryptocurrency Originally published by The Motley Fool
