There's no denying that Nvidia (NVDA 1.78%) is the king of Wall Street in 2023. The chip designer's hardware provides the computational power needed by the popular ChatGPT tool and its GPT-4 artificial intelligence (AI) engine. Many investors expect the chipmaker's success story to continue for years, and that widespread optimism has driven Nvidia's stock price sky-high. Its shares have gained 220% year to date, and 304% over the past 52 weeks -- leading the S&P 500 (SNPINDEX: ^GSPC) index's components in both categories.

However, with these lofty gains in the rear-view mirror, Nvidia's price gains from here could be limited. One could argue that the company's expected AI success has been priced into the stock already -- and then some.

So we asked a few of the preeminent tech experts among The Motley Fool's contributors to share their best AI stock ideas with the rest of us. They proposed these three more modestly priced tech companies that have their fingers firmly on the pulse of the AI opportunity.

IBM: A golden oldie on heavy rotation

Anders Bylund (IBM): This ain't your grandfather's International Business Machines (IBM -0.18%). The former one-stop shop for every information technology need has revamped itself into a specialist in AI and cloud computing. It was a long and painful journey, but the Big Blue you see today packs a punch in the AI market.

That metamorphosis has not only revamped IBM's image but has also molded its financial outlook in a market where valuations often soar to dizzying heights. IBM's stock presents a more tempered stock chart than Nvidia's. Trading at about 14 times its forward earnings projections at a price of $141 per share, IBM's valuation paints a picture of moderation and stability. With a market capitalization of $129 billion, IBM has seen a modest year-to-date gain of 5.5%. That's a stark contrast to Nvidia's stratospheric rise and nosebleed valuation.

The premium on Nvidia's stock price underscores the high-growth expectations embedded within it, a potential risk if its growth narrative should falter. On the other hand, Wall Street appears to have largely forgotten about IBM in its breathless focus on the more exciting stories of Nvidia and ChatGPT.

But IBM's steady ascent in the AI domain, coupled with its more moderate valuation, should appeal to investors seeking a less turbulent path into AI investing. And I'm not kidding about IBM's deep-rooted AI expertise. OpenAI may have kick-started the current AI frenzy with its user-friendly chatbots and image-creation tools, but the whole industry would look very different today if IBM's Deep Blue system hadn't beaten world chess champion Garry Kasparov in 1997. IBM has been to an AI rodeo or two, and its Watson platform offers high-powered AI brains to enterprise-class mega-corporations.

IBM, with its more grounded approach to AI and cloud computing, presents a viable alternative for investors seeking a stable entry point into the burgeoning AI market, especially when compared to the more volatile, high-growth narrative surrounding Nvidia. Big Blue's methodical progression in the AI landscape may not mirror the meteoric rise of Nvidia, but its burgeoning AI capabilities paired with a more moderate valuation make a persuasive case for a potentially smoother ride in the tumultuous AI investment arena.

A software platform that completes the cycle of continuous improvement

Nicholas Rossolillo (ServiceNow): I like to think of software as just another type of "manufactured" product. In this instance, the materials used are chips and code, and instead of factories full of machinery, workers use computers and software tools in the creation of their products. 

And just like any manufacturing process, the latest and greatest products can be used to continuously improve future iterations of the product. 

That's the realm of software I file ServiceNow (NOW 0.43%) under -- the "continuous improvement" part of the computing technology and software manufacturing chain. The company's suite of services is geared toward software development, company employee and operations management, customer digital experience, and more, with the goal of finding and fixing bottlenecks in workflow, and automating digital tasks.  

ServiceNow is an Nvidia partner, and that relationship helps explain how this cycle of continuous technology improvement works. Earlier this year, it was announced that ServiceNow would adopt Nvidia's latest AI chips and software to improve its own platform. In turn, Nvidia would utilize these ServiceNow products to aid in its own development of more chips and software. Pretty cool, right?  

If you're looking for a top way to bet on AI without delving into the battleground that Nvidia has become, ServiceNow is worth a look. For traditional value investors, ServiceNow isn't likely to check off all the right boxes. On a GAAP earnings basis, this is no cheap stock. Shares currently trade for 80 times earnings, and about 45 times Wall Street's consensus estimate for next year's earnings.  

On a free-cash-flow (FCF) basis, though, ServiceNow is far more reasonable, trading at just 49 times FCF. The company also has a long track record of growing its FCF on a per-share basis, which accounts for the dilutive effects of stock-based compensation. 

NOW Free Cash Flow Per Share Chart

Data by YCharts.

Given its more reasonable valuation than Nvidia stock, and stellar growth prospects from AI innovation for its software platform, ServiceNow stock could have great upside potential in the coming years.

The next memory upcycle could be turbo-charged by AI

Billy Duberstein (Micron): Nvidia may have the pole position in AI and may be posting the best financial results of any chip company, but its valuations of 110 times earnings and 41 times book value certainly price in a lot of future good news already.

Meanwhile, memory chip producer Micron (MU -0.63%) trades at a mere 1.7 times book value, so it has a much, much lower bar to clear for its stock to gain ground from here.

Moreover, while the surge in demand for artificial intelligence services is no doubt benefiting Nvidia, AI servers also require tons of DRAM and NAND flash memory -- which are provided by chips that Micron produces.

At the moment, Micron is losing money as a result of severe overproduction for legacy laptop, smartphone, and non-AI server markets during the pandemic. However, as is the case with most deeply cyclical industries, the worse the bust, the bigger the boom coming out of it usually is.

The memory market has begun to heat up in an early indication of the next up cycle, which could be bigger than many think. Micron is one of only three major DRAM producers, and all three have aggressively cut back production this year -- to the tune of 25% to 30% of their bit output -- to get the supply and demand situation back into balance.

But memory bit demand is ever-increasing, especially in the age of AI and the Internet of Things. And when demand comes back, these suppliers won't be easily able just to "turn back on" the production capacity they've idled.

As Micron explained on its last earnings call, it has taken idled machines from legacy memory nodes and repurposed them to help produce leading-edge technology such as high bandwidth memory (HBM) and D5 DRAM. Those leading-edge memory nodes require more manufacturing steps per wafer, so Micron's prior production capacity has now been permanently "reset" lower.

That means that when demand returns, the prior wafer supply will no longer be there. The resulting tighter market should give those memory producers more power to increase prices. Memory price increases combined with increasing bit demand should lead to surging profitability.

In 2024, things should inflect even more sharply for Micron. Early in the year, it will start shipping its new HBM3E memory for artificial intelligence applications. While Micron's rival SK Hynix was the first-mover in HBM and has capitalized on today's major AI training applications, the specs of Micron's new chips outdo even the most advanced HBM chips on the market today. Micron's management has said it expects to eventually have an outsized market share in HBM chips that's greater than its share in traditional DRAM today, and if its technology winds up being as superior as its early samples indicate, Micron should achieve that feat.

Micron has impressively passed rivals in technology inflections over the past year-plus, which should also lead to incremental profitability over rivals once the market recovers. Given that its stock is starting from a low valuation and is still 30% below its all-time high, Micron's stock may very well outdo Nvidia's in the medium term.