Forget Nvidia Stock: 2 Tech Stocks to Buy Instead

There are clear winners, and then there are popular choices. And Nvidia stock (NASDAQ:NVDA) has erred towards simply popular.

| More on:

Nvidia (NASDAQ:NVDA) has been a darling of the stock market, particularly due to its dominance in the artificial intelligence (AI) sector and impressive stock performance. However, there are several reasons why now might not be the best time to invest in Nvidia stock. Today, let’s go into those reasons as the tech stock has recently dropped. Consider two other stocks to pick up instead.

Nvidia falls

Nvidia’s stock has surged dramatically, up 2,636% over the past five years. Such rapid appreciation raises concerns about the stock being overvalued. While Nvidia’s technology and market position remain strong, its high valuation could mean that future gains are limited, and the stock might be due for a correction.

Market experts warn that putting all your investment in such a high-flying stock might not be prudent, especially given the potential for increased competition and market saturation, which happened recently, of course.

Another red flag is the significant insider selling by Nvidia’s chief executive officer, Jensen Huang. Over a span of less than a month, Huang sold 2.04 million shares. Insider selling can sometimes indicate that those closest to the company believe the stock has reached a peak or at least that it won’t see substantial gains in the near future. This action suggests that even those within the company may have doubts about the stock’s continued upward trajectory​​. So, what should you buy instead?

Topicus

Topicus.com (TSXV:TOI) has demonstrated robust financial health and growth. In the first quarter of 2024, the company reported earnings per share (EPS) of €0.22, up from €0.17 in the same period in 2023. This consistent growth in earnings reflects the company’s ability to increase profitability and manage its operations efficiently. With a market capitalization of approximately $9.76 billion, Topicus.com is well-positioned to continue its upward trajectory.

One of the key drivers of Topicus.com’s growth is its strategic acquisitions. The company, a spinoff from Constellation Software, follows a similar playbook of acquiring and nurturing smaller software companies. This strategy not only broadens Topicus.com’s product offerings but also allows it to enter new markets and strengthen its competitive position. Recently, Topicus announced new leadership roles and additional external positions, indicating a focus on expanding its operational capacity and leadership team.

The market sentiment around Topicus.com is optimistic. Analysts predict that the company will continue to experience significant growth. For 2024, sales are projected to reach $1.98 billion, with an expected increase to $2.46 billion by 2025. Investors should also also keep an eye on the upcoming earnings report scheduled for early August 2024.

CGI

Finally, CGI (TSX:GIB.A), a leading global IT and business consulting services firm, offers several compelling reasons for investors to consider adding it to their portfolios. CGI has consistently demonstrated robust financial performance. For the second quarter of fiscal 2024, CGI reported earnings per share (EPS) of $1.46, beating analysts’ expectations. The company generated $2.77 billion in revenue for the quarter, showcasing its ability to maintain strong financial health even amidst challenging market conditions​.

CGI continues to expand its service offerings and market presence through strategic acquisitions. Recently, CGI acquired Celero’s business serving credit unions across Canada, significantly expanding its managed service offerings to more than 90 credit unions nationwide. Such acquisitions not only enhance CGI’s service portfolio but also strengthen its market position and client base.

Finally, investors should also look forward to CGI’s upcoming earnings report, scheduled for July 31, 2024. Positive earnings results can act as a catalyst for the stock, potentially driving up its price. With a market capitalization of $33.95 billion and a strong balance sheet, CGI is well-positioned for future growth and continued success.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Topicus.com. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool recommends CGI, Constellation Software, and Nvidia. The Motley Fool has a disclosure policy.

More on Tech Stocks

Tech Stocks

Top Canadian Stocks to Buy for Growth in 2025

There are a lot of growth stocks you can buy and hold for the long term to build a sizable…

Read more »

hand stacking money coins
Tech Stocks

Billionaires Are Selling Tesla Stock and Betting on This TSX Stock

Tesla stock has long been the one to beat, but after falling in share price, stability may be more key.

Read more »

chart reflected in eyeglass lenses
Tech Stocks

OpenText Stock: Down 27%, Buy Now for Pure Long-Term Perfection

OpenText stock may have dropped after earnings, but according to its CEO, future growth is just getting started.

Read more »

ETF chart stocks
Dividend Stocks

These ETFs Are My 2 Favourites to Buy for 2025

These two top ETFs may be going through some volatility right now, but both are due for huge returns in…

Read more »

A person uses and AI chat bot
Tech Stocks

Missed Out on Nvidia? My Favourite AI Stock to Buy and Hold

Its high growth potential, resilience to the emergence of low-cost LLMs, and low valuation make it a compelling stock in…

Read more »

Abstract Human Skull representing AI
Tech Stocks

1 Top Tech Stock to Invest in Canadian AI Stocks for Long-Term Gains

While many AI companies attract attention for high but speculative growth, this reliable AI stock is worth a look by…

Read more »

e-commerce shopping getting a package
Tech Stocks

Why Shopify (TSX:SHOP) Could Be the Hottest TSX Stock in 2025

Shopify (TSX:SHOP) might have enough steam to push the TSX higher and higher in 2025.

Read more »

online shopping
Tech Stocks

Down 22% From All-Time Highs, Is Shopify Stock a Good Buy in 2025?

Shopify stock has delivered market-beating returns to shareholders since its IPO in 2015. Is the TSX tech stock still a…

Read more »