Prediction: 2 Magnificent Stocks That Can Crush Nvidia in the Return Column Over the Next 3 Years

Group 1: Nvidia's Market Performance and Challenges - Nvidia has gained $1.9 trillion in market cap since the start of 2023, driven by the rise of artificial intelligence (AI) [1][2] - In fiscal 2024, Nvidia recorded $47.5 billion in sales from its Data Center segment, a 217% increase from the previous year, largely due to its A100 and H100 GPUs [2] - Nvidia's net sales rose 126% in fiscal 2024, while its cost of revenue increased by only 43%, showcasing significant pricing power for its AI-GPUs [3] Group 2: Competitive Landscape - Competitors like Intel and Advanced Micro Devices are launching their own AI-accelerated chips, posing a threat to Nvidia's dominance in high-compute data centers [4] - Major customers such as Microsoft, Meta Platforms, Amazon, and Alphabet are not only purchasing Nvidia's GPUs but are also developing their own AI-accelerated GPUs, indicating a potential reduction in reliance on Nvidia [4] Group 3: Historical Context and Future Outlook - Historically, new investment trends, including AI, have experienced early bubble-popping events, suggesting that Nvidia's stock may struggle in the coming years [5] - Berkshire Hathaway and Alphabet are identified as companies with the potential to outperform Nvidia in returns over the next three years due to their strong fundamentals and strategic positioning [6][10] Group 4: Berkshire Hathaway's Investment Strategy - Berkshire Hathaway, led by Warren Buffett, has consistently outperformed the S&P 500, focusing on cyclical stocks, dividend-paying stocks, and share repurchases [6][8] - The company has a $372 billion investment portfolio that is strategically positioned to benefit from long economic expansions [7] Group 5: Alphabet's Growth Potential - Alphabet, parent company of Google, has a dominant position in the internet search market with over 91% share, providing strong ad-pricing power [11] - Google Cloud is rapidly growing and has become the world's No. 3 cloud-infrastructure service platform, contributing to Alphabet's profitability [12] - Alphabet's shares are currently valued at less than 15 times estimated cash flow in 2025, presenting a favorable investment opportunity compared to Nvidia's valuation of nearly 28 times forecast cash flow [12]