Nvidia, Axcelis, and Pinterest all have the potential to generate bigger gains than the top tokens.
The cryptocurrency market has been booming over the past year as stabilizing interest rates have encouraged many investors to re-enter speculative investing. However, cryptocurrencies are still not for everyone. Most of the major tokens on the market remain highly volatile, with their prices driven primarily by supply, demand and market hype.
So, if you're looking for growth but don't want to bet on crypto just yet, we recommend buying some promising tech stocks with firmer fundamentals instead, and we think the following three stocks fit the bill: Nvidia (NVDA -0.71%), Axcelis Technologies (ACLS 0.85%), and Pinterest (PINS -0.57%).
Image source: Getty Images.
1. NVIDIA
Nvidia is the world's largest manufacturer of discrete graphic processing units (GPUs). The chipmaker will control 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 made most of its revenue from gaming GPUs, but the rapid growth of the artificial intelligence (AI) market has made its data center business a core growth engine for the company. Major AI companies, including Microsoft, OpenAI and Alphabet's Google, all use the company's data center GPUs to handle complex AI tasks. The company generated 87% of its revenue from these chips in the most recent quarter.
NVIDIA's stock price has already risen 3,220% over the past five years, but it could still rise further for two simple reasons. First, the company is still growing like a weed: The company's revenue and adjusted EPS surged 126% and 288%, respectively, in fiscal 2024 (ending January 2024).
Analysts expect the company's revenue and adjusted EPS to grow another 98% and 109%, respectively, in fiscal 2025 as market demand for the company's data center chips continues to outstrip supply. Second, NVIDIA's stock looks reasonably priced at 47 times forward earnings, giving it the potential to generate bigger 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, the company's systems are used to insert carbon ions into silicon to create silicon carbide (SiC), a robust material that can operate at higher voltages, temperatures and frequencies than traditional silicon chips.
The company's SiC chips' durability makes them ideal for short-length LEDs, lasers, 5G base stations, military radars and electric vehicles (EVs). Strong EV sales initially drove Axcelis and other SiC stocks soaring, but bulls eventually retreated as the EV market cooled over the past two years. The company's systems are used to make DRAM and NAND chips, so it was also hit by cyclical slowdowns in the memory market as well as macro headwinds in China.
As a result, Axcelis' shares have fallen nearly 40% since hitting an all-time high last July. But after that decline, the company's shares look reasonably valued at 20 times projected earnings. Analysts expect the company's sales and adjusted EPS to decline 7% and 15%, respectively, in 2024. But in 2025, they expect the company to overcome cyclical and macroeconomic challenges and see sales and adjusted EPS grow 16% and 28%, respectively.
According to Markets and Markets, the SiC industry could expand at a compound annual growth rate (CAGR) of 32.6% from 2024 to 2029. This long-term growth could propel Axcelis' shares to new highs well into the decade ahead.
3. Pinterest
Pinterest has carved out a niche for itself in the crowded social media market with its virtual pinboards, which encourage users to curate and share their hobbies and interests with one another. Pinboards are also a natural fit for retailers, who can upload their catalogs to the platform as shoppable pins with integrated payment capabilities.
Pinterest's growth accelerated significantly during the pandemic as more people searched for online shopping ideas, recipes, DIY projects, and family activities on its pinboards. But after the pandemic subsided, its expansion slowed, with revenue growing just 9% in both 2022 and 2023. This slowdown led many investors to dismiss Pinterest as a pandemic-era fad stock, but revenue growth has actually accelerated over the past five quarters.
The company's monthly active users (MAUs) grew 12% year-over-year to 518 million in Q1 2024, marking the second consecutive quarter of double-digit MAU growth. Average revenue per user (ARPU) has also increased again over the past three quarters. The recovery is driven by international expansion, fresh 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 more than 40% of MAUs.
Analysts expect Pinterest's revenue and adjusted EPS to grow 20% and 33%, respectively, in 2024. This acceleration suggests the company has plenty of room to grow, and the stock still looks reasonably valued at 30 times forward earnings.
Suzanne Frey, an executive at Alphabet, serves on The Motley Fool's board of directors. Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet, Microsoft, Nvidia, and Pinterest. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
