But Nvidia faces powerful rivals and the company’s stock price is at risk each quarter unless the company beats high investor expectations and raises guidance.
A better bet might be data center liquid cooling technology provider Vertiv that competes in a less risky business. What’s more, the company’s stock price has outpaced Nvidia’s as I wrote in a December Forbes column.
Nvidia is at the cutting edge of AI technology and is growing much faster — with revenue up 262% in the latest quarter. By contrast, Vertiv — whose Q1 revenue rose a mere 7.8% — is outperforming the AI chip designer when it comes to stock market performance.
How so? In 2023, Vertiv stock was up 269% — 23 percentage points more than Nvidia. In the year ending May 28, Vertiv stock added 422% — compared to Nvidia’s 184% rise. To be sure, Nvidia’s May 28 stock market capitalization of $2.8 trillion trounces Vertiv’s $39.4 billion.
Will Vertiv keep outpacing Nvidia? I see four reasons it could:
Large, growing market opportunity.
Leading market share.
Solid performance and prospects.
Nvidia partnership.
