Nvidia's Overvalued? These 3 AI Stocks Could Deliver Better Returns

The AI revolution is in full swing, and while Nvidia (NASDAQ: NVDA) has been the poster child of this boom, its stock price has surged to dizzying heights. With a 120% year-to-date gain and a 94% revenue jump in Q3, investors are left wondering: Is there room to grow further? For those seeking undervalued alternatives, three companies—Broadcom (AVGO), Advanced Micro Devices (AMD), and Snowflake (SNOW)—offer compelling high-yield opportunities. Let’s dissect why these stocks could outperform Nvidia in the coming year.

1. Broadcom (AVGO): The Undervalued ASIC Titan

Broadcom’s AI revenue skyrocketed 220% to $12.2 billion in fiscal 2024, driven by its ASICs (Application-Specific Integrated Circuits), which dominate cloud infrastructure. Unlike Nvidia’s GPUs, which excel at AI training, Broadcom’s ASICs are optimized for energy efficiency and scalability, making them critical for hyperscale data centers.

Why It’s a Better Play Than Nvidia:
- Market Opportunity: Broadcom’s AI addressable market is projected to hit $60–90 billion by 2027, with a 55–60% market share in ASICs.
- Valuation: Broadcom’s PEG ratio of 0.7 (vs. Nvidia’s ~1.5) suggests it’s undervalued relative to its growth.
- Upside: Analysts see a 23.59% price target to $200.32 over 12 months, outpacing Nvidia’s 27.41% upside.

2. AMD (AMD): The CPU+GPU Hybrid Disruptor

AMD’s Q3 revenue rose 18% to $6.8 billion, fueled by its 3D V-Cache technology in EPYC processors, which boost AI workloads by up to 66%. While Nvidia dominates GPU-driven AI training, AMD’s hybrid CPU+GPU approach offers cost-effective solutions for inference tasks and general computing.

Why It’s a Better Play Than Nvidia:
- Valuation: AMD’s stock dipped after lower Q4 guidance, creating a buying opportunity despite strong fundamentals.
- Upside: Analysts project a 35.19% price target to $184.46 over 12 months—18% higher than Nvidia’s upside.
- Diversification: AMD’s exposure to both CPUs and GPUs positions it to capture $5.7 billion in remaining performance obligations (RPO) in data center and client markets.

3. Snowflake (SNOW): The AI-Driven Data Unifier

Snowflake’s Q3 revenue jumped 28% to $941 million, with its Cortex AI platform and Snowflake Intelligence driving demand. As enterprises embed AI into core operations (IDC predicts 67% of 2025 AI spending will do so), Snowflake’s $5.7 billion RPO (up 55% YoY) signals strong customer retention.

Why It’s a Better Play Than Nvidia:
- Undervalued Potential: Analysts’ 6% price target to $186.60 overlooks its 40%+ EPS growth in 2025–2026 and a 127% net revenue retention rate.
- Niche Dominance: Snowflake leads the agentic AI market (AI agents), which could hit $45 billion by 2025.
- Margin Expansion: Gross margins rose to 72% in Q3, indicating pricing power in its cloud data platform.

Why These Stocks Beat Nvidia

While Nvidia’s 27.41% upside to $173.50 is impressive, these alternatives offer higher growth catalysts at better valuations:
- Broadcom and AMD leverage undervalued PEG ratios and superior tech (ASICs/3D V-Cache).
- Snowflake targets underpenetrated AI niches with strong RPO growth.

Nvidia’s dominance in GPUs isn’t enough to justify its premium valuation—especially when rivals are capturing adjacent markets with superior margins and scalability.

Conclusion: Time to Diversify Beyond the GPU Giant

Investors chasing AI’s next wave should look beyond Nvidia. Broadcom’s ASICs, AMD’s hybrid tech, and Snowflake’s data unification all offer better risk-adjusted returns than the industry leader.

• Broadcom (AVGO): Buy at $162.30 for a 23.59% upside to $200.32.
• AMD (AMD): Target 35.19% upside to $184.46.
• Snowflake (SNOW): A conservative $186.60 target hides 40%+ earnings growth potential.

Remember: AI isn’t just about training models—it’s about infrastructure, data, and specialized solutions. These three stocks check all the boxes.

As always, conduct due diligence and consider risk factors like regulatory hurdles and execution risks before investing.