Cryptocurrencies have surged over the past decade, with the prices of Bitcoin and Ethereum, the two most successful digital currencies, soaring 67,000% and 13,000%, respectively. However, investors have cooled on crypto in recent years, discouraged by its tendency to rise or fall in the blink of an eye.
The biggest advantage of cryptocurrency is its decentralized nature, making it far easier to exchange and trade between countries than traditional currencies. However, this is also why it has become one of the most volatile investments. With no governing authority, it can be difficult to pinpoint the reason for price fluctuation, making it too akin to gambling. So, despite their meteoric rises, Bitcoin and Ethereum have actually fallen 42% and 57%, respectively, since 2021.
As a result, it might be a good idea to seek more-reliable investments, such as tech stocks. Wall Street has a long history of rewarding innovative companies with significant and consistent gains over the long term. With high-growth industries like artificial intelligence (AI) and virtual/augmented reality (VR/AR) on the rise, now could be an ideal time to invest.
Here are three tech stocks with more potential than any cryptocurrency.
1. Nvidia
Nvidia (NVDA -0.09%) has captivated Wall Street this year, with its shares soaring 245% since Jan. 1. The company has rallied investors by becoming the primary chip supplier to AI companies worldwide. Nvidia's years of dominance in graphics processing units (GPUs) gave it a head start in the market, allowing it to take advantage of the AI boom as chip demand soared.
In the second quarter of Nvidia's fiscal 2024 (ended in July), revenue rose 101% year over year, with operating income up 1,260%. The monster growth was mainly thanks to a 171% increase in the company's data center segment, which profited from soaring GPU sales for AI.
The stock is an expensive option right now, with a forward price-to-earnings (P/E) ratio of 46. But the company's dominance in AI remains a compelling reason to invest in it for the long term. Demand for chips is likely to continue rising in the coming years as more companies seek powerful hardware to take their products to the next level. Meanwhile, Nvidia has the chips and brand recognition to serve the entire sector.
With the power of AI and the many other tech markets that require high-powered chips, Nvidia easily has more potential than any cryptocurrency over the next decade and beyond.
2. Alphabet
It's hard to go wrong with the world's fourth-most-valuable company, Alphabet (GOOGL 0.33%) (GOOG 0.38%). Potent brands such as Google, YouTube, and Android make it challenging to go a single day without using an Alphabet product, presenting endless advertising opportunities.
As a result, the company has become the biggest name in the $680 billion digital advertising market. It hit some roadblocks over the past year as macroeconomic headwinds curbed ad spending. However, Alphabet appears to be back on a growth path, with revenue rising 11% year over year in the third quarter.
The company is also heading into 2024 with significant potential in AI. Next year, Alphabet will launch Gemini, a large language model based on massive data sets, which is expected to threaten OpenAI's GPT-4. The varied business gives it countless ways to monetize its AI offerings, like expanding its library of AI cloud services, improving its search function, offering better-targeted advertising, analyzing viewing trends on YouTube, and more.
A forward P/E of 24 makes Alphabet one of the biggest bargains in AI as well as tech in general. The company is a far more reliable buy than crypto and will likely rise far higher over the long term.
3. Amazon
Amazon (AMZN -0.76%) has been a favorite among investors in 2023, with its stock up 69% year to date. The company has made an impressive comeback in its e-commerce business after posting significant losses in 2022. And it has ramped up its expansion into AI, which could bring major gains in the coming years.
In the third quarter, revenue growth was 13%, beating analyst expectations by $1.5 billion. The North American segment hit over $4 billion in operating income, a happy turnaround from the $412 million in losses it reported in the year-ago quarter. Various restructuring moves have brought Amazon's retail business back to profitability, proving the strength of management and the company's worth as a long-term investment.
The company is making promising inroads in AI. Its cloud platform, Amazon Web Services (AWS), holds a leading market share in cloud computing and has introduced several new AI tools this year. AWS also plans to venture into chip development, diversifying its position in AI as it goes up against the likes of Nvidia and Advanced Micro Devices.
Dominance in e-commerce and the cloud market gives it a powerful position in the tech field. Cost-cutting and AI have put the company on a promising growth trajectory that looks too good to ignore. As a result, Amazon's stock is a screaming buy, with far more potential than any cryptocurrency.
