3 Stocks To Buy That Could Be The Next Nvidia

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Nvidia (NASDAQ: NVDA ) took the tech world by storm last week when the company reported impressive first quarter results. Since then, NVDA has solidified its position as a 2023 flash stock, with shares rising from $300 a month ago to $400 today. This growth spurt has helped Nvidia achieve a trillion-dollar valuation, in line with recent forecasts.

Nearly a week after its earnings report, Nvidia's success is still supporting tech stocks. This is not surprising given the trends seen in the market last year. Between the advancement of artificial intelligence (AI) and the attack on the metaverse, everything seems to be changing for this Silicon Valley treasure. Instead, it all boils down to one question: Which company will Nevia be next?

The answer can be complicated. Of course, the stock of many chips increased on the news of Nvidia's earnings. But competitors like Advanced Micro Devices (NYSE: AMD ) and Intel (NASDAQ: INTC ) could hurt Nvidia as it grows. According to Investopedia :

"As technology in the industry is moving from CPU to GPU processing, the current wave of Nvidia won't help everyone. Intel (INTC) was the main player in the processor market, while AMD (AMD) was the main competitor. NVIDIA is the leader in GPU technology and its recent development has pushed AI technology into It is the drive to bring the table.

Investpedia notes that the demand for AI is growing steadily, which will eventually allow any company in the field to capture market share. However, it is important to understand that some chip manufacturers have a better chance than others. To find the next Nvidia, let's look at companies whose market capitalization is still low to provide an attractive entry point for investors.

Next Nvidia: Skywater Technology (SKYT)

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This obscure company doesn't get as much attention as its large-cap peers, but Skywater Technology (NASDAQ: SKYT ) is worth a look. The company operates as a semiconductor design and manufacturing foundry and describes itself as "the only US-owned pure silicon foundry."

If true, the company certainly has a profitable niche that will give it plenty of room to play in the coming months. Even before Nvidia's earnings boosted its chip inventory, Skywater was on the upswing thanks to President Joe Biden's focus on boosting domestic chip production. That's why the stock price is up 35% year-to-date (YTD). Only five analysts covered by CNN Business backed SKYT stock, earning a consensus buy rating since August 2022.

Now that investors' enthusiasm for chip stocks is growing, Skywater has a better chance of riding the wave. After an amazing year, SKYT is still trading at $10/share, which offers investors a great buying opportunity.

According to InvestorPlace contributor Josh Inomoto, SKYT shares have plenty of upside potential despite their "poor financial health." Although Skywater has yet to catch up with Nvidia in terms of rankings, the company is still well positioned to capitalize on the current chip boom. The average analyst price target on TipRanks is currently $21.50, indicating significant upside potential.

Taiwan Semiconductor ( TSM )

© InvestorPlace News by TSM Stock: Taiwan Semiconductor logo next to Taiwan factory Source: ToyW/shutterstock

Chip shares of Taiwan Semiconductor (NYSE: TSM ) are not trading after Nvidia's first-quarter results. The stock rose in its best trading week in more than a year.

This bodes well for its growth potential. As InvestorPlace contributor Joel Bagole points out, both chips and semiconductors are growing in importance, with Taiwan producing 60 percent of the world's semiconductor supply. For this reason, Baglole says that TSM shares can make millionaires. Earlier this month he wrote:

“The good news for investors is that TSM shares are recovering from last November's 52-week low. Semiconductor inventories in Taiwan have fallen 4 percent over the past 12 months. The price is currently 16 percent below its 52-week high. This presents an excellent opportunity for investors looking for long-term growth stocks to add to their portfolios.

In addition, Taiwan Semiconductor works closely with Nvidia to ride the wave of the industry leader amid the AI ​​boom. TSM also has market share that is difficult to compete with. While some investors remain skeptical of Taiwan-related stocks due to geopolitical tensions, the attractive opportunities that TSM shares can present to investors cannot be ignored.

Next Nvidia: MaxLinear (MXL)

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Like Skywater, the company is off Wall Street's radar when the focus is on chip stocks. However, it is arguably one of the most underrated games in the industry.

MaxLinear (NASDAQ: MXL ) serves the communications industry with "highly integrated, high-frequency, mixed-signal analog semiconductor products." According to Alex Sirua of InvestorPlace , technology is helping almost everyone get the information they need faster. This means that the demand for MaxLiner services will be huge.

In fact, this has not been an easy year for MXL stock, which has fallen more than 10% since the beginning of the year. However, as Sirua points out, for the most part the company has strong fundamentals and gives investors plenty of room for growth. Eight out of ten Wall Street analysts on TipRanks rate MXL stock a “Buy” with an average target price of $36.30. Considering that MXL is currently trading below $30, this is good upside potential.

Part of Nvidia's stellar revenue stream is the company's thriving data center business. As MaxLiner's chip boom pushes it further, it will have the opportunity to make more use of data streaming.

At the time of publication, Samuel O'Brien was not directly or indirectly involved in the securities referred to in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com's publication guidelines.

Samuel O'Bryant has been a financial market and policy analyst for over three years. His areas of expertise include electric vehicle (EV) inventory, green energy and NFT. O'Bryant likes to help everyone understand the complexities of the economy. He ranks in the top 15% of stock pickers on TipRanks.

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