Recently, Nvidia (NASDAQ: NVDA) stock made a lot of hype after it posted bombastic results for the fourth quarter of 2023. The generative artificial intelligence (AI) boom drove Nvidia’s data centre revenue by a whopping 409% to US$18.4 billion. The data centre segment alone accounted for 83% of Nvidia’s fourth-quarter revenue. Many industries have adopted generative AI across different use cases. Nvidia’s graphic card performance is unbeatable in training and inference of gen AI and large language models.
Nvidia: A super tech stock
In May 2023, when Nvidia stock crossed the US$400 milestone, it looked like a pretty expensive stock. However, the potential and scalability of AI is such that it can revolutionize the way we do things. And Nvidia is at the core of the AI. This US$400 stock price became US$880 in less than a year. The fundamentals are such that it could continue to grow.
The stock might look expensive, trading at 36 times its sales per share. But its triple-digit sales growth and competitive edge make it worth a buy.
Other than Nvidia, there is another super tech stock that can give you 80-100% growth in the short term. But the problem with this super tech stock is it is highly volatile and falls at the same speed as it grows. So, you have to invest actively in this stock and play around the $4-$8 range.
A super tech stock besides Nvidia
Another super tech stock besides Nvidia is Hive Digital Technologies (TSXV:HIVE). While one Nvidia stock trades above US$880, one Hive stock trades at around $4.5. Hive is a Bitcoin mining company and has ventured into cloud services. It is offering its Nvidia graphic card-powered data centres to companies that want to perform high-performance computing tasks like AI.
You can think of Hive as a part of the AI supply chain. Unlike Nvidia, Hive doesn’t have any competitive edge and unbeatable technology. However, it has the advantage of entering early in crypto mining in 2010. This early mover advantage helped it mine more Bitcoin at a cheaper rate.
Bitcoin prices keep fluctuating depending on the adoption of cryptocurrency. Since Hive has significant Bitcoin inventory, its stock price moves alongside the BTC price, while its cloud business reduces the downside risk.
Comparing the two stocks’ last 12-month performance
Nvidia is a long-term growth stock. It has surged 280% in the last 12 months. The strategy for this stock is to buy and hold for the long term and keep buying more at every dip. That is not the case with Hive.
The blockchain stock is highly volatile and influenced by BTC prices. However, it has established a range of $4-$8. The strategy for this stock is to buy at $4 and sell when the stock reaches close to $7.
In the last 12 months, Hive stock has surged 29.7%. But during this time frame, it saw three rallying cycles, with peaks of $8.5, $7, and $6, respectively. If you purchased 100 shares of Hive at $4-$4.5 in each of the cycles, you could have converted your $400-$450 into $2,050, selling them at $8, $7, and $5.5 in respective cycles. However, a US$400 investment in Nvidia would have become US$880 today, but the risk of downside is also less.
