The cryptocurrency market was temporarily boosted following President Donald Trump’s election victory, as some investors hoped his light approach to crypto regulations and the full promotion of certain coins would make many digital tokens higher.
However, the threat of tariffs, the fear of a potential recession, and the rise in pessimism from some investors have caused a lot of encryption over the past few months. Although tech stocks suffer from the same fate, I think the long-term potential of tech stocks is higher and based on more specific use cases.
Here we have two tech stocks that will ultimately be ahead of Crypto’s profits over the next few years.
Image source: Getty Images.
Taiwan Semiconductor Manufacturing (NYSE: TSM) It is the world’s largest semiconductor manufacturer and has already benefited greatly from the surge in chip demand from artificial intelligence. In addition to its general chip manufacturing dominance, it also represents an estimated 90% of the world’s AI processors.
The financial results of Taiwanese semiconductor chip manufacturing leads were incredible. The company’s revenue rose 37% to $26.9 billion in the fourth quarter (ends December 31), and earnings per share increased 57% to $2.24 per US deposit receipt.
There has been a lot of talk about AI stocks falling lately, but it’s too early to invoke the artificial intelligence boom. Large and small tech companies have invested heavily in AI software and services, and will drive the sales of advanced semiconductors for the next few years.
Taiwan Semiconductors predicts that CEO CC Wei will double revenues from AI accelerators in 2025, as the strong surge in AI-related demand continues, even after more than tripling in 2024.
As Taiwan’s semiconductor stocks have declined 15% since the recent high-tech sale, the company’s shares are trading at a relative discount of 24.1 in price and return, down from 30 P/E just six months ago.
nvidia’s (NASDAQ: NVDA) The long-term potential lies in the same veins as Taiwanese semiconductors. Although Nvidia does not manufacture semiconductors, its chip designs account for some of the most sophisticated AI processors on the market.
High-tech companies have been seeking to get Nvidia processors over the past few years, and as a result, the company accounts for up to 95% of all AI chips worldwide. This demand has led to an increase in Nvidia’s sales and revenue. This included fourth quarter sales growth of $39.3 billion, with EPS growth of 82% to $0.89.
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However, Nvidia has not benefited from all of this AI demand. In a fourth-quarter revenue call, management said that demand for Blackwell AI processors is “the fastest product lamp in our history, with unprecedented product lamps in their speed and scale,” achieving $11 billion in sales in the quarter alone.
There will be more and more debate about how quickly (or not) data center spending will grow over the next few years. A significant slowdown from high-tech companies buying advanced processors will certainly undermine Nvidia’s sales and revenue. But investors now seem to be primarily concerned about the macroeconomic impacts, like the recession, and are taking these concerns into the tech sector.
A slowdown in the economy will affect tech companies, but it’s a mistake to focus too much on it and forget that it’s in the first stages of AI. PWC estimates that AI could add $15.7 trillion to global GDP in 2030, and tech companies will need more and more sophisticated processors to meet their AI goals.
So, even if a temporary economic slowdown occurs, Nvidia still has a great opportunity in the coming years. It also means that current concerns may be clouding investors’ views on Nvidia’s long-term potential.
I think there are several good reasons why investors own cryptocurrencies, but Taiwanese semiconductors and Nvidia offer investors a much more grounded investment as these two large tech companies will help them build the future of AI.
Of course, nothing is guaranteed. But while many cryptocurrencies are still very speculative, artificial intelligence is already well established, and technology companies continue to build companies for years to come.
Have you ever felt like you missed a boat when buying the most successful stocks? If you do that, you’ll want to hear this.
In rare cases, a team of analysts issue “double-down” stock recommendations for companies they think they are trying to pop. If you’re worried about having already missed the opportunity to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
nvidia:If you invest $1,000 when it doubled in 2009,$286,347! *
Apple: If you invest $1,000 when it doubled in 2008, it would cost $42,448! *
Netflix: If you invest $1,000 when it doubled in 2004, then $504,518! *
Currently, we are issuing “double-down” alerts to three incredible companies, and we may not have a chance like this anytime soon.
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*Stock Advisor will return as of April 1, 2025
Chris Neger has no position in any of the stocks mentioned. Motley Fool has been appointed as a semiconductor manufacturing company for Nvidia and Taiwan, and is advocating it. Motley Fools have a disclosure policy.
Two more potential tech stocks than cryptocurrency were originally issued by The Motley Fool
