3 AI Stocks I Like Better Than NVIDIA

Constellation Software (TSX:CSU) is a Canadian AI stock that is far cheaper than NVIDIA (NASDAQ:NVDA).

| More on:
AI microchip

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

NVIDIA (NASDAQ:NVDA) is one of the most talked about artificial intelligence (AI) stocks in recent memory. Rising 1,124% in just a few short years and eclipsing Apple as the world’s biggest company by market cap, it has done big things.

With all that being said, it’s beginning to look like NVIDIA’s winning ways are coming to end — or at least slowing down. Last week, the company put out an earnings release that easily beat expectations yet was followed by NVDA shares tanking in the markets. Additionally, the company’s billionaire backers, including its own chief executive officer (CEO), have been selling at a furious pace.

Today, NVIDIA trades at 60 times earnings and 30 times sales. Stocks this pricey don’t usually stay that way for long. Fortunately, there are other ways to get AI exposure in your portfolio. In this article, I will explore three stocks that I like more than NVDA at today’s prices.

Taiwan Semiconductor

Taiwan Semiconductor Manufacturing (NYSE:TSM) is a Taiwanese computer chip company that is best known as NVIDIA’s contract manufacturer. All this explosive revenue growth that you see NVIDIA doing results in sales for TSM as well as NVIDIA. This fact shows up in TSMC’s financials. For example, over the last 12 months, the company’s revenue, earnings, and free cash flow have grown at the following rates:

  • Revenue: 22.65%
  • Earnings: 15.85%
  • Free cash flow: 20.6%

No, these are not even close to NVIDIA’s blistering fast growth rates in the TTM period. However, TSMC’s business is much more diversified than NVIDIA’s. It does business with on-device AI companies like Apple, traditional tech companies, car companies, and so much more. So, if there is a downturn in NVIDIA’s data centre business, TSMC can still thrive. That, combined with its much lower multiples, makes TSMC a better buy than NVIDIA today, in this author’s opinion.

Constellation Software

Constellation Software (TSX:CSU) is a Canadian software company best known for its excellent long-term compounding track record. It invests in relatively small companies at the early stages of their development, with the aim of eventually integrating them with its existing operations. In this respect, it operates somewhat like a venture capital firm, only one that holds long-term instead of seeking “exits.”

Created with Highcharts 11.4.3Constellation Software PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Constellation Software’s AI exposure is not quite as strong as that with NVIDIA or TSMC, but it’s definitely there. For example, the company’s marketing consulting software has generative AI features that allow customers to create and deploy content swiftly. With its innumerable subsidiaries, Constellation has more AI under the hood than just that — it just happens to be one good example.

Brookfield

Brookfield Corp (TSX:BN) is a Canadian financial services company that you might be surprised to see on this list. Best known for its investments in infrastructure, renewables and real estate, it’s not something that looks very AI-related.

But looks can be deceiving. Brookfield actually does have considerable investments in AI, mainly through its partially owned subsidiary, Brookfield Infrastructure Partners. Brookfield Infrastructure Partners invests in AI data centres, which are of vital importance in actually serving AI to end users. These investments make Brookfield a real player in generative AI, even if it isn’t writing the code or designing the chips itself.

Should you invest $1,000 in Cameco right now?

Before you buy stock in Cameco, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Cameco wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Andrew Button has positions in Brookfield and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Apple, Brookfield Corporation, Brookfield Infrastructure Partners, Constellation Software, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

The letters AI glowing on a circuit board processor.
Tech Stocks

How I’d Allocate $10,000 to AI Stocks in Today’s Market

Shopify (TSX:SHOP) is one of Canada's most compelling AI stocks.

Read more »

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »

ways to boost income
Tech Stocks

How I’d Invest $11,500 in Canadian Fintech Stocks to Revolutionize My Finances

Propel Holdings stock's recent dip could be a trading opportunity for long-term financial gains. Here's why the fintech stock is…

Read more »

Start line on the highway
Tech Stocks

Where I’d Invest $5,000 in Growth Stocks With Long-Term Potential Through 2030

DO you have $5,000 to invest to grow your wealth over the long term? These growth stocks could deliver strong…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »