Investors wondering whether the biggest growth was over for Nvidia (NASDAQ: NVDA) were surprised yet again last week. The top tech stock surged past all-time highs, passing the US$1,000 mark. Yet, if you’re like me, you might be happy to just sit on the sidelines of that stock.
Why’s that?
Nvidia stock has grown so much in a short period of time. Granted, a lot of that is due to its stellar performance. The semiconductor company announced in its most recent earnings report that it posted a 262% rise in revenue. Its data centre unit, in particular, saw immense revenue growth, up 427% year over year.
In response to the growth in revenue, Chief Executive Officer Jensen Huang stated that the company was now basically making artificial intelligence (AI) “factories.” These will remain essential as demand remains “so strong,” according to Huang.
Even so, some question whether the share price has surged beyond its fair value. We’ve seen this happen in the past, with shares suddenly dropping off when investors need to take their returns. But if you want to get in on growth like Nvidia stock without as much risk, there’s certainly another way to go.
Consider Descartes
Descartes Systems Group (TSX: DSG) is another company that investors may want to consider after this bull run. The company is a global leader in providing on-demand, software-as-a-service solutions for logistics and supply chain management. While not a semiconductor producer, it could potentially benefit from the growth of AI and the demand for semiconductors in several ways.
For instance, driven by companies like NVIDIA, can greatly enhance logistics and supply chain operations. Descartes Systems Group can leverage AI technologies to improve the efficiency and accuracy of their solutions. This includes optimizing route planning, predictive maintenance, demand forecasting, and real-time shipment tracking.
What’s more, the growth in AI and machine learning enables more sophisticated data analytics capabilities. Descartes can use these advanced analytics to gain deeper insights into supply chain operations, helping clients to make more informed decisions. By utilizing AI-powered analytics, Descartes can offer enhanced features like anomaly detection, risk management, and strategic planning, thereby increasing the value of their services.
Supported by Nvidia
While not directly related to Nvidia stock then, Descartes stock certainly will have its advantages from the growth of the company. Nvidia, a leader in AI and graphic processing unit (GPU) technology, indirectly supports companies like Descartes Systems Group by providing the essential hardware and AI frameworks necessary for building and deploying sophisticated AI applications.
NVIDIA’s GPUs are integral in training AI models and running AI algorithms at scale, which can be used by Descartes to enhance their software solutions. Moreover, as NVIDIA continues to innovate and push the boundaries of AI capabilities, the downstream impact on software providers like Descartes will likely include access to more powerful tools and technologies that can be incorporated into their logistics and supply chain solutions.
Sure, Nvidia stock and its growth are impressive. But so is Descartes stock. And it’s far more stable. Shares are now up 30% in the last year as of writing, with stable revenue and net income that will keep on climbing. So, instead of Nvidia stock, consider this heavy hitter instead.
