3 AI chip stocks that look more overvalued than NVIDIA right now

Demand for artificial intelligence (AI) chips has skyrocketed in recent years. Big tech companies, startups, and governments are all keen to secure the most advanced chips on the market to train AI models and launch AI applications. Growth projections for AI applications are becoming more ambitious as this technology becomes more widespread. AI stocks There was a sudden rebound.

But some AI stocks have become so expensive that some analysts are now saying,AI bubble“That could deflate. GPU chip market leader Nvidia Corp. (NVDA), the early beneficiaries of AI adoption were the main focus of these bubble warnings. NVDA's stock price has risen nearly 244% over the past 52 weeks, and the company is now worth more than $2 trillion.

however, Approximately 10% pullback On NVDA during recent sessions, there are several AI chip stocks that look even more expensive than NVDA. Here are some important statistics investors should know:

AI Chip Stock #1: Arm Holdings (ARM)

UK-based Arm Holdings Plc ADR (arm) is a leading semiconductor and software design company, specializing in the development and licensing of intellectual property (IP) for central processing unit (CPU) products and related technologies. ARM technology is the foundation of a wide range of electronic devices, from smartphones to sensors, and is becoming increasingly important in the Internet of Things (IoT) and AI fields. The current market capitalization is $130.5 billion.

ARM stock has soared since it was reintroduced to the public market last year. The stock is up 73.8% year-to-date, easily outperforming the S&P 500 index. ($SPX) It rose 8.6% during this period.

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The stock's current forward P/E ratio is 108.42x, making it more than twice as expensive as NVDA, which has a P/E ratio of 40.39x. Based on analysts' forecasts for 24.8% earnings growth in 2025, ARM's price-to-earnings (PEG) ratio is 2.37x, much higher than NVDA's PEG ratio of 1.36x.

Arm's stock price is Bright earnings report Total revenue for the quarter rose 14% year-over-year to $824 million, beating Wall Street expectations. Adjusted EPS was $0.29, which also exceeded analyst expectations. Last month, NVIDIA announced: $147 million investment The entry into Arm Holdings further boosted the stock price.

Looking to the fourth quarter of 2024, ARM expects EPS of $0.28 to $0.32 and revenue of $850 million to $900 million. ARM too Upward revision of FY2024 forecasts Expected adjusted EPS is between $1.20 and $1.24.

The consensus rating for Arm Holdings stock is a “moderate buy.” 23 analysts have recommended the stock, of which 13 rate it as a “strong buy,” nine give it a “hold,” and one advises it as a “strong sell.”

of Analyst average price target Arm Holdings' stock price is $92.53, and the stock is already trading above that. The $180 price target Rosenblatt assigned to ARM in February suggests the stock could rise as much as 38.7% from current levels.

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AI Chip Stock #2: Advanced Micro Devices (AMD)

Santa Clara-based Advanced Micro Devices, founded in 1969 (AMD) is a prominent semiconductor company shaping the data center, embedded, gaming, and PC markets. AMD is known for pioneering advances in modern computing. It has a market capitalization of $305.7 billion.

AMD stock has risen 94.8% over the past 52 weeks, outpacing the S&P's 30.3% gain.

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The stock is currently trading at a forward P/E ratio of 70.18 times, which is much higher than NVDA's P/E ratio of 40.39 times. Similarly, AMD's PEG ratio is 2.81x, more than 2x that of NVDA. This suggests that AMD is overvalued compared to its rivals in AI chip stocks.

AMD's fourth quarter sales The $6.17 billion exceeded Wall Street expectations of $6.14 billion, and adjusted EPS of $0.77 was in line with Wall Street consensus. For the first quarter of 2024, AMD expects revenue to be approximately $5.4 billion ± $300 million. AMD predicts that revenue from AI chips will exceed $2 billion in 2024, marking significant progress in the field of generative AI computing.

Advanced Micro Devices stock has a consensus rating of “Strong Buy.” Of the 33 analysts who have recommendations for the stock, 27 have rated it a “strong buy,” 1 has rated it a “moderate buy,” and 5 have rated it a “hold.”

of Analyst average price target Advanced Micro Devices' stock price was $189.43, about the same as Monday's closing price. However, the high price target of $270 that KeyBanc assigned in January suggests the stock could rise as much as 41.6% from current levels.

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AI Chip Stock #3: ASML Holding NV (ASML)

ASML Holding NV founded in 1984 (ASML)Headquartered in the Netherlands, the company develops, produces, markets, sells and services advanced semiconductor equipment systems for chip manufacturers. The company provides lithography, metrology, and inspection systems for the semiconductor market. have a de facto monopoly. The current market capitalization is $370.9 billion.

ASML Holding stock has gained 48.5% over the past 52 weeks, outperforming the broader market over this period.

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The company's stock currently trades at 46.93 times forward earnings, making it cheaper than AMD and ARM, but still more expensive than NVDA on this basis. His PEG ratio for ASML is 2.32x, almost double that of NVDA. This suggests that ASML is trading at a premium relative to its expected growth.

The company has achieved strong growth and profitability, as evidenced by: 4th quarter sales Revenues were $7.79 billion, gross margin was 51.4%, and earnings improved to $5.60 per share. Both earnings and sales exceeded Wall Street expectations.

ASML's fourth-quarter order book more than tripled from third-quarter levels to more than 9 billion euros, but the company stood by its outlook for flat sales in 2024.

ASML Holding stock has a consensus rating of Strong Buy. Of the 17 analysts who have recommendations for the stock, 13 rate it as a strong buy and 4 advise it as a hold.

of Analyst average price target ASML is priced at $927, a discount from Monday's closing price. However, the high price target of $1,100 suggests the stock could rise as much as 16.8% from current levels.

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On the date of publication, Shristi Suman Jayaswal I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Summarize this content to 100 words
Demand for artificial intelligence (AI) chips has skyrocketed in recent years. Big tech companies, startups, and governments are all keen to secure the most advanced chips on the market to train AI models and launch AI applications. Growth projections for AI applications are becoming more ambitious as this technology becomes more widespread. AI stocks There was a sudden rebound.But some AI stocks have become so expensive that some analysts are now saying,AI bubble“That could deflate. GPU chip market leader Nvidia Corp. (NVDA), the early beneficiaries of AI adoption were the main focus of these bubble warnings. NVDA's stock price has risen nearly 244% over the past 52 weeks, and the company is now worth more than $2 trillion.

however, Approximately 10% pullback On NVDA during recent sessions, there are several AI chip stocks that look even more expensive than NVDA. Here are some important statistics investors should know:AI Chip Stock #1: Arm Holdings (ARM)UK-based Arm Holdings Plc ADR (arm) is a leading semiconductor and software design company, specializing in the development and licensing of intellectual property (IP) for central processing unit (CPU) products and related technologies. ARM technology is the foundation of a wide range of electronic devices, from smartphones to sensors, and is becoming increasingly important in the Internet of Things (IoT) and AI fields. The current market capitalization is $130.5 billion.ARM stock has soared since it was reintroduced to the public market last year. The stock is up 73.8% year-to-date, easily outperforming the S&P 500 index. ($SPX) It rose 8.6% during this period.www.barchart.com
The stock's current forward P/E ratio is 108.42x, making it more than twice as expensive as NVDA, which has a P/E ratio of 40.39x. Based on analysts' forecasts for 24.8% earnings growth in 2025, ARM's price-to-earnings (PEG) ratio is 2.37x, much higher than NVDA's PEG ratio of 1.36x. Arm's stock price is Bright earnings report Total revenue for the quarter rose 14% year-over-year to $824 million, beating Wall Street expectations. Adjusted EPS was $0.29, which also exceeded analyst expectations. Last month, NVIDIA announced: $147 million investment The entry into Arm Holdings further boosted the stock price.

Looking to the fourth quarter of 2024, ARM expects EPS of $0.28 to $0.32 and revenue of $850 million to $900 million. ARM too Upward revision of FY2024 forecasts Expected adjusted EPS is between $1.20 and $1.24.The consensus rating for Arm Holdings stock is a “moderate buy.” 23 analysts have recommended the stock, of which 13 rate it as a “strong buy,” nine give it a “hold,” and one advises it as a “strong sell.”of Analyst average price target Arm Holdings' stock price is $92.53, and the stock is already trading above that. The $180 price target Rosenblatt assigned to ARM in February suggests the stock could rise as much as 38.7% from current levels.www.barchart.com
AI Chip Stock #2: Advanced Micro Devices (AMD)Santa Clara-based Advanced Micro Devices, founded in 1969 (AMD) is a prominent semiconductor company shaping the data center, embedded, gaming, and PC markets. AMD is known for pioneering advances in modern computing. It has a market capitalization of $305.7 billion.AMD stock has risen 94.8% over the past 52 weeks, outpacing the S&P's 30.3% gain.

www.barchart.com
The stock is currently trading at a forward P/E ratio of 70.18 times, which is much higher than NVDA's P/E ratio of 40.39 times. Similarly, AMD's PEG ratio is 2.81x, more than 2x that of NVDA. This suggests that AMD is overvalued compared to its rivals in AI chip stocks. AMD's fourth quarter sales The $6.17 billion exceeded Wall Street expectations of $6.14 billion, and adjusted EPS of $0.77 was in line with Wall Street consensus. For the first quarter of 2024, AMD expects revenue to be approximately $5.4 billion ± $300 million. AMD predicts that revenue from AI chips will exceed $2 billion in 2024, marking significant progress in the field of generative AI computing.Advanced Micro Devices stock has a consensus rating of “Strong Buy.” Of the 33 analysts who have recommendations for the stock, 27 have rated it a “strong buy,” 1 has rated it a “moderate buy,” and 5 have rated it a “hold.”of Analyst average price target Advanced Micro Devices' stock price was $189.43, about the same as Monday's closing price. However, the high price target of $270 that KeyBanc assigned in January suggests the stock could rise as much as 41.6% from current levels.www.barchart.com
AI Chip Stock #3: ASML Holding NV (ASML)ASML Holding NV founded in 1984 (ASML)Headquartered in the Netherlands, the company develops, produces, markets, sells and services advanced semiconductor equipment systems for chip manufacturers. The company provides lithography, metrology, and inspection systems for the semiconductor market. have a de facto monopoly. The current market capitalization is $370.9 billion.

ASML Holding stock has gained 48.5% over the past 52 weeks, outperforming the broader market over this period.www.barchart.com
The company's stock currently trades at 46.93 times forward earnings, making it cheaper than AMD and ARM, but still more expensive than NVDA on this basis. His PEG ratio for ASML is 2.32x, almost double that of NVDA. This suggests that ASML is trading at a premium relative to its expected growth.The company has achieved strong growth and profitability, as evidenced by: 4th quarter sales Revenues were $7.79 billion, gross margin was 51.4%, and earnings improved to $5.60 per share. Both earnings and sales exceeded Wall Street expectations.ASML's fourth-quarter order book more than tripled from third-quarter levels to more than 9 billion euros, but the company stood by its outlook for flat sales in 2024.ASML Holding stock has a consensus rating of Strong Buy. Of the 17 analysts who have recommendations for the stock, 13 rate it as a strong buy and 4 advise it as a hold.

of Analyst average price target ASML is priced at $927, a discount from Monday's closing price. However, the high price target of $1,100 suggests the stock could rise as much as 16.8% from current levels.
www.barchart.com
On the date of publication, Shristi Suman Jayaswal I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/3-ai-chip-stocks-that-look-more-overvalued-than-nvidia-right-now 3 AI chip stocks that look more overvalued than NVIDIA right now

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