Prediction: 2 Incredible Artificial Intelligence (AI) Stocks That Will Be Worth More Than Nvidia in 3 Years

Core Viewpoint - The market is currently underappreciating the potential of Nvidia and two other tech giants, Amazon and Meta, which are expected to surpass Nvidia's valuation in the coming years [1][8]. Nvidia - Nvidia is nearing a $4 trillion market capitalization, making it the first company to approach this milestone after rapid growth from under $1 trillion just a couple of years ago [4]. - The company's revenue grew by 69% in the first quarter, reaching $44.1 billion, with an adjusted gross margin of 71.3% [5]. - Despite its strong performance, Nvidia faces competition as rivals are catching up, and a significant portion of its business relies on a few large customers who are exploring alternatives to reduce costs [6][7]. Amazon - Amazon operates the second-largest retail business and the largest cloud computing platform globally, benefiting from increased spending on AI [9]. - Amazon Web Services (AWS) is generating billions in revenue and growing at a triple-digit percentage rate, with an operating margin of 39.5% [10]. - The company plans to invest over $100 billion in capital expenditures this year to expand its data center capacity, supported by strong retail operations and improved logistics [11][12]. - Amazon is projected to achieve substantial free cash flow growth, potentially reaching $100 billion, which could elevate its market cap to $4 trillion [14]. Meta Platforms - Meta is the largest social media company with over 3.4 billion users and is heavily investing in AI, planning $70 billion in capital expenditures this year [15][16]. - The company's ad revenue increased by 16% in the first quarter, driven by higher engagement and ad prices, with further growth expected from AI advancements [17]. - Meta is developing AI agents to optimize ad campaigns, which could enhance advertising effectiveness and increase revenue [18][20]. - The stock is currently trading at 29 times forward earnings, with expectations of over 50% growth in stock value over the next three years, potentially approaching a $3 trillion market cap [21].