UK investors have been piling into Nvidia stock this year. This is due to the fact that the company – which designs high-performance computer chips – is at the heart of the artificial intelligence (AI) revolution.
I see Nvidia as a great AI stock. However, it’s not the only way to play the theme. With that in mind, here are three others for the AI boom.
AMD
First up, we have Advanced Micro Devices (NASDAQ: AMD) or ‘AMD’ for short. It’s another leading designer of high-performance computer chips.
AMD is very active in the AI space. But it doesn’t have the market position that Nvidia has.
Its market share could potentially rise in the future though.
Right now, AMD is ramping up production of its flagship MI300 artificial intelligence chips. These are are designed to compete against Nvidia’s H100 AI chips and could be launched by the end of the year.
If the company can get this product to the market in the near future, demand could be very high as right now Nvidia’s chips are in short supply.
AMD stock is a little cheaper than Nvidia from a valuation perspective. This is a plus.
However, it’s still quite expensive (the forward P/E ratio is about 39 versus 42 for Nvidia). If growth slows, the stock could take a hit.
Lam Research
Next, we have Lam Research (NASDAQ: LRCX). It’s a leading provider of semiconductor manufacturing equipment.
This company strikes me as a great ‘picks and shovels’ play on the artificial intelligence boom.
AI is going to require a lot of chips to be successful (it’s rumoured that ChatGPT-5 is going to require about 50,000 Nvidia H100 chips). So, demand for chip manufacturing equipment should be high in the years ahead.
Lam looks well placed to benefit here. It specialises in equipment that helps chip manufacturing plants (fabs) print layers of transistors in advanced chips. And it’s one of the biggest players in this space.
Lam shares currently trade on a P/E ratio of about 24. So, they are a bit less risky than Nvidia, to my mind. They can still be volatile though as the semiconductor industry is cyclical.
I’m confident in the long-term story, however.
It’s worth noting that Lam recently raised its quarterly guidance thanks to AI-related demand so it’s already benefiting from the technology.
Arista Networks
Finally, we have Arista Networks (NYSE: ANET).
It specialises in lightning-fast ethernet switches and routers for data centres. It also offers software that controls the hardware and keeps customers locked in.
I see this company – which serves the likes Microsoft, Alphabet, and Amazon – as a good play on AI due to the fact that its technology helps organisations move vast quantities of data over the Internet at incredible speeds.
With its products, tech companies can build high-performance AI networks in a simple and scalable manner.
This stock has done well this year thanks to AI, rising about 60%. After that kind of jump, and with the stock now trading on a P/E ratio of around 32, a pullback could be on the cards.
Taking a long-term view, however, I think it has huge potential. I’m keen to add it to my portfolio.