Investing in AI: Nvidia Leads, But Don't Overlook Others

Investors eyeing AI stocks should consider Nvidia, Arm Holdings, and Ambarella as key players. The growth potential in AI applications highlights a trend worth watching closely in the stock market.

Date: 19-02-2025

AI Rating: 7

Overview of AI Stock Recommendations
Many investors regard Nvidia as a strong choice due to its leading position in GPU production for AI tasks. The analysis also highlights Arm Holdings and Ambarella as noteworthy alternatives in the expanding AI market.

Arm Holdings Analysis
Arm's revenue growth demonstrates potential with a 33% increase in fiscal 2022, followed by a decline in fiscal 2023. However, a 21% revenue increase in fiscal 2024 signifies recovery, driven by demand for AI-optimized designs. Analysts project a CAGR of 23% for revenue and a remarkable 83% for adjusted EPS from fiscal 2024 to 2027, reflecting strong growth expectations for this company.

Ambarella Analysis
Ambarella has faced challenges, including regulatory barriers and declining revenue, with only a 2% increase in fiscal 2023 and a 33% decline in fiscal 2024. Yet, analysts foresee a recovery with a CAGR of 19% from fiscal 2024 to 2027, amid improvements in auto and IoT businesses and an increasing mix of higher-cost AI chips. Although not currently profitable, the forecast for positive adjusted EBITDA by fiscal 2026 indicates improving financial health.

Stocks: NVDA ARM AMBA