In the rapidly evolving technology landscape, companies like NVIDIA have become benchmarks for investors due to their dominance in AI, semiconductors, and cutting-edge computing solutions. This analysis highlights stocks to buy right now that exhibit similar market characteristics to NVIDIA, offering a thorough examination of their financial stability and growth prospects using the Stocks 2 Buy app.
Key Financial Metrics for Stock Evaluation
To assess the potential of these stocks, several critical metrics are utilized:
- Piotroski Score: This metric, scored from 0 to 9, evaluates a company’s financial robustness by analyzing nine factors, including profitability, leverage, liquidity, and operational efficiency. A higher score reflects stronger financial health, making it an essential tool for value-focused investors. You can calculate everything manually using the guide that explains how to calculate the Piotroski score, or use the Stocks 2 Buy app, which calculates the Piotroski score in seconds.
- Consensus Target Price: This represents the average price target set by analysts, providing a glimpse into a stock’s anticipated future value. You can also calculate the stock target price manually using the DCF model, DDM model, or the Multiplicators model. Or also use the Stocks 2 Buy app that calculates the stock growth potential in seconds.
- Growth Potential: Calculated as the percentage difference between the current market price and the consensus target price, this metric indicates the potential for stock price appreciation.
Best Stocks To Buy Now: Alternatives to NVIDIA
Before we begin our analysis, it’s worth mentioning that you can undertake similar analysis with other stocks, from different industries, not only NVDA. For that, you need to choose some particular stock that you like, then get its closest peers (similar companies in the industry) and use the Stocks 2 Buy app to see companies’ fundamentals and then pick the stock with the best fundamentals.
For extracting your chosen company’s closest peers, you can use the financial modeling prep Stock Peers API endpoint. Register with FMP, obtain your custom API key, and you can use the endpoint to get closest company peers. The endpoint looks like this:
https://financialmodelingprep.com/api/v4/stock_peers?symbol=NVDA&apikey=YOUR_API_KEY
Replace the NVDA in the adress line with your desired stock ticker and input your custom api key where it says "YOUR_API_KEY"
For example, if you use the mentioned endpoint, the closest peers for NVDA will look like the image below:
Now when you know your chosen stock's closest peers, download the Stocks 2 Buy app from the App Store and let’s start the analysis.
Open the Stocks 2 Buy app, then register/login, and go to the Stock Type screen, then input the stock ticker and press the Analyze button to see the most important fundamental indicators for that ticker (company). Input tickers that you got from the endpoint inside the app one by one.
Below is a detailed look at five stocks that mirror NVIDIA’s market dynamics (closest peers), along with their financial metrics and strategic strengths extracted with the help of the Stocks 2 Buy app:
1. Advanced Micro Devices (AMD)
- Piotroski Score: 8 (Strong Financial Health)
- Growth Potential: 45.10%
- Key Strengths:
- AMD is making significant strides in AI and gaming, positioning itself as a direct rival to NVIDIA in high-growth sectors.
- Under CEO Lisa Su’s leadership, AMD has achieved notable market share gains in both CPUs and GPUs.
The Stocks 2 Buy app identified AMD as a Value stock based on a strong Piotroski score and high growth potential, making AMD an amazing long-term hold idea.
2. Taiwan Semiconductor Manufacturing Company (TSM)
- Piotroski Score: 8 (Strong Financial Health)
- Growth Potential: -10.2%
- Key Strengths:
- As the world’s largest foundry, TSM plays a critical role in the supply chains of major tech firms, including NVIDIA, ensuring consistent demand.
- Its advancements toward 2nm chip production keep it at the forefront of semiconductor innovation.
The Stocks 2 Buy app identified TSM as a Growth stock driven by high historical returns and strong fundamentals but with negative growth potential, suggesting that TSM can be a good mid-term or even short-term idea (good on growing/booming market), but you should wait until analysts raise their target prices to reflect the company’s undervaluation before considering it for a longer term.
3. Micron Technology (MU)
- Piotroski Score: 6 (Moderate Financial Health)
- Growth Potential: 38.55%
- Key Strengths:
- Micron is a leader in the memory market, capitalizing on the growing demand for data storage in AI and cloud computing.
- The cyclical recovery of the memory sector positions Micron for potential significant gains.
The Stocks 2 Buy app suggests that this stock is a good buy idea on any market, since no specific market was assigned as it has negative return dynamics in the past (suggesting that the stock touched its local minumum), a low dividend yield but great growth potential of 38.55%, and a somewhat strong Piotroski score. However, if you want to consider this stock for a longer term, wait until fundamentals improve or choose another stock among its closest peers with better fundamentals. For the shorter term and intraday trading, use the Candle Analyst screen to get trade recommendations based on Japanese candlestick patterns analysis.
4. ASML Holding (ASML)
- Piotroski Score: 8 (Strong Financial Health)
- Growth Potential: 27%
- Key Strengths:
- ASML holds a monopoly in EUV lithography, a critical technology for manufacturing advanced chips, making it indispensable to the industry.
- Its global client base ensures both stability and growth opportunities.
The Stocks 2 Buy app says that ASML is a Value stock, making it a good long-term hold idea, driven by strong fundamentals (Piotroski Score of 8), high growth potential of 27%, and good growth dynamics in the past 3 months, signaling that investors may be starting to put an eye on this stock.
5. Broadcom (AVGO)
- Piotroski Score: 4 (Weaker Financial Health)
- Growth Potential: -8.42%
- Key Strengths:
- Broadcom’s diverse revenue streams, spanning hardware and software (bolstered by its VMware acquisition), provide multiple growth pathways.
- Its track record of strategic acquisitions has consistently expanded its market reach and capabilities.
Although AVGO had great growth dynamics in the past 6 and 3 months of 49% and 34%, respectively, its negative growth potential and low Piotroski score make it the weakest stock among its closest peers. This may suggest that investors may start selling this stock in favor of other peer stocks considered above. But since historically this stock showed good growth dynamics, the app says that it is a Growth stock, making it somewhat a good short-term idea on a booming market.
Strategic Insights and Investment Considerations
This analysis combines quantitative financial data, such as the Piotroski Score and growth potential, with qualitative insights into each company’s strategic advantages and market positioning. These stocks to buy right now share traits with NVIDIA, such as innovation in high-growth sectors and strong market demand. However, the tech sector’s volatility requires a cautious approach. Investors should integrate these findings into a broader strategy, factoring in market trends, personal risk tolerance, and long-term goals. Consulting a financial advisor and conducting independent research with tailored assumptions are recommended steps before finalizing any investment decisions. I hope my article was useful. Please share it if you are getting some value from it to help me spread the knowledge.
Comments