2 Tech Stocks With More Potential Than Any Cryptocurrency

The global cryptocurrency market is worth $2.4 trillion. Top performers Bitcoin and Ethereum have gained 100% and 68% over the past 12 months as inflation eases, bringing less stable investments back into fashion. But cryptocurrencies remain a riskier play than most stocks, with their volatility known for their ability to rise and fall on the whim of something as simple as a social media post.

The decentralized nature of crypto makes it easy to use and allows transactions to be made worldwide with minimal fees. However, without tangible ties to an organization, it can also mean that there is little reason or cause for price fluctuation.

As a result, investors looking to grow their portfolios with less risk may want to consider technology stocks. Technology is an ever-expanding market driven by demand for constantly updated software and hardware products. As a result, investing in companies with solid business models and market penetration can yield significant growth over the long term.

Here are two tech stocks with more potential than cryptocurrencies.

1.Intel

You might be surprised to see Intel (NASDAQ:INTC) on this list, with the stock down 39% since 2021. The company doesn’t have a reputation for leaving crypto behind. However, Intel is turning things around and operating in sectors that could help its stock price rise in the coming years.

Intel shares have risen 13% in the past month as investors focused on its latest restructuring. The company announced a “fundamental shift” in its operations that will allow it to expand fully into the foundry market by building chip factories across North America in 2023.

According to Allied Market Research, the semiconductor foundry market is estimated to be worth $107 billion in 2022 and is projected to more than double to $232 billion by 2032. Chip demand has skyrocketed in recent years as advancements in various technology sectors have required more powerful hardware to take their designs to the next level.

Since the start of 2023, artificial intelligence (AI) has become a critical growth driver for chip sales, which are needed for graphics processing units (GPUs) to develop productive software. As a result, Intel has set its sights on becoming a leading AI chipmaker, allowing it to profit from the growing demand in the sector. Considering that chip giants like Nvidia (NASDAQ: NVDA) and Advanced Micro Devices are outsourcing much of their production, Intel is positioning itself to be the leading chipmaker in the US.

The AI ​​market is expanding at a CAGR of about 37% on track to reach nearly $2 trillion in spending by 2030. Chip demand is likely to continue to grow over that time, suggesting Intel is nowhere near its ceiling.

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INTC PE Ratio Table

Additionally, two key metrics suggest Intel is trading at a valuation that could attract new investors: The company’s price-to-earnings ratio and price-to-sales ratio are both below their 12-month averages. The company is heavily invested in some of the world’s most lucrative sectors, which could see its stock outperform the cryptocurrency market over the next decade.

2.Nvidia

Nvidia’s stock has been growing faster than Bitcoin and Ethereum for at least five years, while the company’s strong position in the tech space suggests it will continue to beat the crypto market long into the future.

NVDA Table

Before 2023, Nvidia was known for its dominant position in the gaming industry. The chipmaker is responsible for 88% of the discrete desktop GPU market, which has grown from 65% in the last 10 years. The company’s chips have become the preferred choice for gamers worldwide who use GPUs to build high-powered gaming PCs.

Nvidia’s success in the market has led to its expansion into many other technology areas, from portable game consoles to laptops to cloud platforms and most importantly AI. The tech giant has reinvented itself as one of the biggest threats in AI as its AI GPUs have become the gold standard. Nvidia now has a lucrative list of prominent customers, with Microsoft, ChatGPT developer OpenAI and Alphabet’s Google Cloud using its chips.

Nvidia’s success in AI has seen its quarterly revenue and operating income increase by 93% and 149% respectively last year. Meanwhile, its free cash flow increased by 281% to $39 billion. By comparison, Nvidia’s rival AMD’s free cash flow has increased by just over $1 billion this year. So in addition to its dominant market share, Nvidia is better equipped financially to continue investing in its technology and maintain its leadership in AI.

Nvidia’s massive growth potential means its stock remains a buy, even with a forward price-to-earnings ratio of 47, making it a better option than any cryptocurrency.

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

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool owns positions in and recommends Advanced Micro Devices, Alphabet, Bitcoin, Ethereum, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 call option on Intel, long January 2026 $395 call option on Microsoft, short August 2024 $35 call option on Intel, and short January 2026 $405 call option on Microsoft. The Motley Fool has a disclosure policy.

2 Tech Stocks With More Potential Than Any Cryptocurrency was originally published by The Motley Fool