Nvidia Is Yesterday’s News: These 2 Artificial Intelligence (AI) Stocks Are Poised to Skyrocket Up to 1,050%, According to Select Wall Street Pundits


For much of the last two years, no trend has captivated the attention of investors quite like artificial intelligence (AI).

The potential for AI-backed software and systems to learn over time without human intervention gives this technology the ability to improve productivity and alter consumer/enterprise consumption habits in most sectors and industries. It’s why the researchers at PwC expect the global addressable market for AI to reach $15.7 trillion by the turn of the decade.

Thus far, semiconductor behemoth Nvidia (NASDAQ: NVDA) has been the undisputed beneficiary of the rise of AI. But according to select Wall Street pundits, two other artificial intelligence stocks offer truly eye-popping upside — up to 1,050%!

A toy rocket set atop messy stacks of coins and paperwork displaying financial data.

Image source: Getty Images.

Sorry, Nvidia, but you’re yesterday’s news

Between the start of 2023 and shortly after Nvidia completed its historic 10-for-1 stock split in June 2024, its valuation soared from $360 billion to a peak of $3.46 trillion. Although it wasn’t the first $3 trillion company, we’ve never witnessed a market-leading business tack on $3 trillion in value in less than 18 months.

Nvidia’s expansion has truly been textbook. The company’s AI-graphics processing units (GPUs) rapidly became the preferred choice in enterprise data centers focused on running generative AI solutions and training large language models (LLMs). Based on estimates from the analysts at TechInsights, Nvidia has accounted for 98% of the GPUs shipped to data centers in back-to-back years. Plus, with its prized H100 backlogged, it’ll likely maintain a near-monopoly like market share in 2024.

Exceptional demand and otherworldly pricing power for Nvidia’s AI-GPUs has been assisted by the all-important CUDA software platform. CUDA is the toolkit used by developers to build LLMs and get the most out of their Nvidia hardware. Think of CUDA as the hook that usually keeps clients loyal to Nvidia’s ecosystem of products and services.

But all periods of euphoria eventually come to an end on Wall Street, and Nvidia may very well be yesterday’s news.

One of the biggest advantages Nvidia possesses is its pricing power. With demand for AI-GPUs overwhelming supply, Nvidia’s chips have often commanded a 100% to 300% price premium to rival hardware. But this could soon change.

A number of rival companies, including Advanced Micro Devices, are ramping up production of their considerably cheaper AI-GPUs which are, for the moment, in supply. Businesses wanting to gain first-mover advantages may be strongly incented to use these rival chips.

Furthermore, Nvidia’s four-largest customers by net sales are internally developing AI-GPUs as either complements or eventual replacements to the AI-GPU hardware they’ve ordered from Nvidia. The writing certainly appears to be on the wall that access to AI-accelerated data center “real estate” will be harder to come by in 2025 and onward.

As new chips become available and Nvidia’s larger customers supplement their needs with internally developed AI-GPUs, Nvidia is very likely to see its pricing power and gross margin fade. In short, Nvidia’s best days are likely in the rearview mirror.

But based on the forecast of select Wall Street pundits, this isn’t the case for two other potentially high-growth AI stocks.

An all-electric Tesla Model 3 driving down a highway in wintry conditions.An all-electric Tesla Model 3 driving down a highway in wintry conditions.

The Model 3 is Tesla’s top-selling sedan. Image source: Tesla.

Tesla: Implied upside of 1,050%

The first artificial intelligence stock that could blow investor’s socks off, in terms of upside, is electric-vehicle (EV) manufacturer Tesla (NASDAQ: TSLA). The CEO and Chief Investment Officer of Ark Invest, Cathie Wood, has pegged Tesla’s stock as heading to $2,600 per share by 2029. Based on its share price at the time of this writing, this would translate into eventual upside of a cool 1,050%!

The primary thesis behind Ark’s Monte Carlo analysis is that autonomous ride-hailing (i.e., robotaxis) will drive much of Tesla’s growth. Ark’s expected case is for Tesla to generate $1.2 trillion in sales by 2029, 63% of which would originate from its robotaxi operations. What’s more, 86% of the $440 billion in forecast earnings before interest, taxes, depreciation, and amortization (EBITDA), would come from autonomous ride-hailing services.

Although Tesla is North America’s leading EV manufacturer, and the company has done something no other automaker had achieved for over a half-century — build a new car company from scratch to mass-production — there are a multitude of reasons to believe Wood’s price target on the company won’t come anywhere close to reality.

The glaring flaw in Wood’s Monte Carlo analysis is that it assumes rapid adoption of Tesla’s robotaxi. However, Tesla has precisely zero autonomous robotaxis on public roads today, and hasn’t surpassed Level 2 full self-driving autonomy for years.

By comparison, Mercedes-Benz began selling vehicles with Level 3 autonomous self-driving technology in California and Nevada late last year, and has been developing hands-free Level 4 autonomous driving systems. Tesla has rapidly lost its lead when it comes to autonomous driving capabilities and is highly unlikely to achieve the sales and EBITDA targets Cathie Wood has laid out.

To make matters worse, Tesla is losing its grip in the EV space with competition coming out of the woodwork. After kicking off a price war last year that saw Tesla slash the price of its EV models on more than a half-dozen occasions, its operating margin has, predictability, plummeted. The kick in the pants is that these price cuts haven’t halted a rise in global EV inventory for the company.

Last but not least, a progressively larger percentage of the company’s pre-tax income can be traced to regulatory tax credits sold to other automakers and interest income on its cash position. These are unsustainable sources of income and not what you’d expect from a market leader.

Suffice it to say, I don’t believe Tesla is the “next Nvidia.”

Mobileye Global: Implied upside of 216%

The other AI stock with tantalizing upside that could make Nvidia yesterday’s news is advanced driver assistance systems (ADAS) and autonomous driving technologies company Mobileye Global (NASDAQ: MBLY). Noticing the next-gen vehicle/EV trend yet?

Evercore ISI global automotive and mobility analyst Chris McNally believes Mobileye stock can jump to $35 per share. Though this is below its record-closing high, it would represent a jaw-dropping 216% increase from where shares are trading at the time of this writing.

The optimism surrounding Mobileye has to do with the ongoing addition of technology and driver safety features with each new generation of vehicles — especially electric vehicles. The company’s lineup of EyeQ chips is being leaned on to power SuperVision, an end-to-end ADAS system enabled by 11 cameras and autonomous vehicle maps that learn over time.

While there’s plenty of excitement surrounding this technology, the EV industry is running into challenges that typically plague early stage innovations. The lack of available EV infrastructure, among other factors, has weakened global EV sales in recent quarters and led to reduced demand for Mobileye’s solutions.

Mobileye Global also pointed to a key customer outside of China delaying the launch of its ADAS system, as well as new tariffs in Europe and the U.S., as added reasons it’s had to temper its sales guidance of late. The company’s full-year sales guide of $1.64 billion at the midpoint is well below the peak of $1.96 billion that had once been expected in 2024.

If there’s a silver lining for Mobileye Global, it’s that the company closed out the second quarter with $1.2 billion in cash and cash equivalents and had no debt on its balance sheet. Even with lumpy near-term orders, Mobileye possesses exceptional financial flexibility.

Though it could take some time for ADAS technology demand to mature, Mobileye’s solutions look well-positioned for eventual success.

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

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Tesla. The Motley Fool recommends Mobileye Global. The Motley Fool has a disclosure policy.

Nvidia Is Yesterday’s News: These 2 Artificial Intelligence (AI) Stocks Are Poised to Skyrocket Up to 1,050%, According to Select Wall Street Pundits was originally published by The Motley Fool



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