3 Tech Stocks With More Potential Than Any Cryptocurrency

The cryptocurrency market heated up last year as stabilization of interest rates led many investors back to speculative investments. But cryptocurrencies are still not for everyone; Many of the market’s top tokens are still highly volatile and their prices are largely determined by supply, demand and market excitement.

So if you’re looking for growth but don’t want to roll the dice on cryptocurrencies just yet, it’s a good idea to buy a few promising tech stocks with more solid fundamentals instead. I believe these three stocks fit the need: Nvidia (NASDAQ: NVDA), Axcelis Technologies (NASDAQ: ACLS), and Pinterest (NYSE: PINS).

Image source: Getty Images.

1. Nvidia

Nvidia is the world’s largest manufacturer of discrete graphics processing units (GPUs). The chipmaker controlled 88% of the discrete desktop GPU market in the first quarter of 2024, according to Jon Peddle Research, and 97% of the AI ​​accelerator market in 2023, according to TechInsights.

Nvidia once generated most of its revenue from gaming GPUs, but the rapid growth of the artificial intelligence (AI) market has turned its data center business into a key growth engine. Leading AI companies like Microsoft, OpenAI, and Alphabet’s Google all use data center GPUs to process complex AI tasks. It generated 87% of its revenue from these chips in the last quarter.

Nvidia’s shares are already up 3220% over the past five years, but they could go even higher for two simple reasons. First, it’s still growing like a weed. Its revenue and adjusted earnings per share increased 126% and 288%, respectively, in fiscal 2024 (ending January 2024).

Analysts expect revenue and adjusted EPS to grow 98% and 109%, respectively, in fiscal 2025 as market demand for data center chips continues to exceed available supply. Second, Nvidia’s shares appear to be reasonably valued at 47 times forward earnings, so it could post larger gains than most cryptocurrencies.

2. Axcelis Technologies

Axcelis’ ion implantation systems are used to implant ions of one element into another material. In the semiconductor market, their systems are used to insert carbon ions into silicon to produce silicon carbide (SiC), a robust material that can operate at higher voltages, temperatures, and frequencies than traditional silicon chips.

The flexibility of SiC chips makes them ideal for short-length LEDs, lasers, 5G base stations, military radars, and electric vehicles (EVs). Buoyant electric vehicle sales initially lit a fire in Axcelis and other SiC stocks, but the bulls eventually pulled back as the electric vehicle market cooled over the last two years. It has also been affected by the cyclical slowdown in the memory market because its systems are used in the production of DRAM and NAND chips, as well as macro headwinds in China.

The story continues

That’s why Axcelis’ shares are down almost 40% after reaching an all-time high last July. But after this decline, its shares appear to be reasonably valued at 20 times forward earnings. Analysts expect revenue and adjusted EPS to decline 7% and 15%, respectively, in 2024. But in 2025, they forecast revenue and adjusted EPS to grow 16% and 28%, respectively, as cyclical and macroeconomic challenges overcome.

According to Markets and Markets, the SiC industry could grow at a compound annual growth rate (CAGR) of 32.6% from 2024 to 2029. This steady growth could push Axcelis’ shares to new highs by the end of the decade.

3.Pinterest

Pinterest has carved out its own place in the crowded social media market with virtual boards that encourage users to choose their hobbies and interests and share them with each other. Flyers were also a natural fit for retailers, allowing them to upload their catalogs to its platform as shopping pins with integrated payments.

Pinterest’s growth accelerated significantly during the pandemic as more people searched boards for online shopping ideas, recipes, DIY projects, and family activities. But its expansion slowed after the pandemic subsided, and its revenue rose only 9% in both 2022 and 2023. This slowdown has led many investors to consider this the fashion stock of the pandemic era, but revenue growth has actually accelerated over the past five quarters.

Monthly active users (MAUs) increased 12% year-on-year to 518 million in the first quarter of 2024; This marked the second consecutive quarter of double-digit MAU growth, with average revenue per user (ARPU) increasing again in the last three quarters. This recovery has been fueled by its overseas expansion, new video content, AI-driven recommendations based on curated content, new e-commerce tools, and a healthy influx of Gen Z users, who now account for over 40% of its MAUs.

Analysts expect Pinterest’s revenue and adjusted earnings per share to grow 20% and 33%, respectively, in 2024. This acceleration suggests there’s plenty of room for growth, and its shares still look reasonably valued at 30 times forward earnings.

Should you invest $1000 in Nvidia right now?

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Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Microsoft, Nvidia, and Pinterest. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

3 Tech Stocks That Have More Potential Than Any Cryptocurrency Originally published by The Motley Fool