Explore These 3 AI Stocks Beyond Nvidia

While Nvidia has been the star AI stock recently, its high expectations could lead to potential pitfalls. However, the AI sector continues to thrive, and if you’re looking to diversify, consider these three stocks over Nvidia.

Taiwan Semiconductor Manufacturing (NYSE: TSM)

Taiwan Semiconductor Manufacturing (TSMC) is at the heart of AI innovation, producing the chips powering today's cutting-edge AI technology. TSMC's products are integral to Nvidia’s GPUs and also to Apple’s latest AI-driven devices.

With AI-related revenue projected to grow at a 50% compound annual rate over the next five years, TSMC expects this segment to comprise more than 20% of its total sales. Despite a 75% stock surge this year, TSMC’s growth prospects remain robust as its products become essential in an increasingly AI-driven world.

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)

Alphabet, the parent company of Google, has long championed AI. Although initially caught off guard by the rise of generative AI in late 2022, Alphabet quickly regained its footing with the successful launch of its Gemini model.

Alphabet's AI integration extends to its advertising products, helping advertisers create effective campaigns and match ads with the right audience. While this hasn't directly resulted in a significant revenue spike, it solidifies Alphabet's leading position in the advertising space.

Trading at around 25 times forward earnings, Alphabet offers a more stable investment with steady growth, a solid dividend, and an aggressive share repurchase plan.

Salesforce (NYSE: CRM)

Salesforce, primarily known for its customer relationship management software, is leveraging AI to enhance its offerings. By integrating AI into its platform, Salesforce empowers its customers with better information and AI-driven chatbots for improved customer service.

With its strong market position, getting its AI strategy right is crucial for Salesforce to maintain dominance and drive growth. Despite recent maturity signs with high single-digit revenue growth, Salesforce has introduced a dividend and aims to achieve peak profit margins similar to Adobe's 30%.

Investment Considerations

All three companies offer more stability compared to Nvidia, which has experienced cyclical performance. Investing in Alphabet, Taiwan Semiconductor, and Salesforce provides a balanced approach to capitalizing on AI’s growth potential without the high volatility associated with Nvidia.