Forget Nvidia: 2 Tech Stocks to Buy Instead

Not all tech stocks are riding the coattails of artificial intelligence, and that’s not necessarily bad. It gives you more options within the tech sector.

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Artificial intelligence (AI) is changing the business landscape and stock market in more ways than one. There are several examples of its transformative potential, one of which is Nvidia’s rise to become the most valuable company in the world. The semiconductor manufacturer rode two consecutive bullish trends — crypto and now AI.

But even though the AI hype train is far from its last stop, Nvidia’s performance reflects a waning momentum, and if you haven’t bought yet, you may consider two other alternatives from the Canadian tech sector.

A logistics software company

Descartes Systems Group (TSX:DSG) is one of the most consistently growing tech stocks in Canada and has been for the past 15 years. That doesn’t mean a straight upward trajectory. Still, most of the stock’s movement over that period has been upward, with a few dips driven by market and sector forces and catalysts.

It has gone up about 165% in the last five years alone, and if it continues at this pace, it may offer three-fold growth to its investors in the next decade. This consistent growth and resilience against a variety of weak market conditions (including the 2020 crash) are strong reasons to consider it a long-term pick instead of a stock like Nvidia, which may offer relatively inconsistent performance.

Created with Highcharts 11.4.3Descartes Systems Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Descartes Systems focuses on logistics, and it has managed to create the world’s most expansive logistics network around its platform.

This includes a variety of stakeholders across the globe, and the fundamental strength of its primary offering (the platform) is fueling and sustaining the company’s prolonged and stable growth. The only concern some investors might have is its valuation, which is relatively high considering its price-to-earnings ratio of 70.

An IT consulting company

Montreal-based CGI (TSX:GIB.A) is one of the largest IT and business consulting firms in North America, with close to six decades of successful history endorsing its business model and operational practices.

The company offers several services to a wide range of corporate clients and has a decently sized portfolio of proprietary solutions. It has catered to about 5,500 end-to-end service clients across the globe and has a footprint of 400 locations.

Created with Highcharts 11.4.3CGI PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

While not as rewarding as Descartes, CGI has been an almost equally (if not more) consistent grower. This includes the last five-year growth of about 47%. The stock is much more attractively valued, though it cannot be counted among the undervalued stocks of the sector, let alone the market.

Foolish takeaway

The two tech stocks offer significantly more reliable and stable growth potential than the global semiconductor star, even if the return potential might not be as attractive. These companies also have a more resilient business model and may survive negative breakthroughs related to AI in far better shape than Nvidia.

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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends CGI and Descartes Systems Group. The Motley Fool has a disclosure policy.

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