CDNS

3 AI Stocks to Buy Following the 2024 Nvidia GTC Conference

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Nvidia (NASDAQ:NVDA) delivered yet another exciting GTC conference this year. Once again, CEO Jensen Huang stole the show. The latest and greatest AI chips (Blackwell) are on the horizon, and they’re sure to give the AI models a nice performance boost. At the pace Nvidia is moving, it’s hard to believe any competitor out there can catch up. Demand continues to be hot, and it could become even hotter as companies finally begin raking in decent returns on their hefty AI investments.

It wasn’t just the new Blackwell chips, which offer significant performance leaps over the popular H100 chips, that should have investors cheering. Nvidia also showed off some impressive platform capabilities. As the company looks to become more of a platform company than just a provider of chips, I’m sure some of the bulls out there can justify further gains.

In any case, here are three notable AI stocks to buy that stand to benefit alongside the chip giant.

Synopsys (SNPS)

Person holding mobile phone with logo of American technology company Synopsys Inc. (SNPS) on screen in front of web page. Focus on phone display. Unmodified photo.

Source: T. Schneider / Shutterstock.com

Synopsys (NASDAQ:SNPS) is a chip design company and AI innovator that’s been riding hot of late, with more than 87% in gains posted over the past two years. As the company moves forward with its Nvidia partnership, it’s tough to tell how much of a growth jolt the firm could stand to get over the coming years.

The company has already made good use of Nvidia’s Hopper Superchip to accelerate the performance of its AI-leveraging software. Reportedly, Hopper helped its software enjoy 15x worth of run-time gains. These are some remarkable numbers. As the next generation of Nvidia chips lands, it will be interesting to see how much faster things can get.

Given the recent momentum in SNPS stock, I’d argue that investors are already getting in ahead of the trade. So, even if the performance gains continue, it may prove difficult to nudge the stock any higher. Though many analysts on Wall Street view SNPS stock as a buy, I’d be inclined to view it more as a buy on a pullback. Whether one comes anytime soon, though, remains a mystery.

Amazon (AMZN)

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Source: Daniel Fung / Shutterstock

Amazon (NASDAQ:AMZN) is another tech titan that could benefit profoundly as it continues dealing with Nvidia. The Amazon Web Services (AWS) division has played a key role in helping AMZN stock rebound from the lows of December 2022. As AWS deepens its partnership with Nvidia, it will be interesting to see where AMZN stock goes from here as it looks to take off to new highs like some of its better-performing Magnificent Seven peers.

The Blackwell line of Nvidia chips is coming soon to AWS. In fact, AWS will be one of the first cloud firms to offer access to the GB200 Grace Blackwell Superchip. Given Amazon’s seemingly insatiable appetite for AI computing, I do not doubt AWS will continue to be a massive growth driver.

Unlike SNPS stock, I view AMZN stock as fairly valued at around 42.2 times forward price-to-earnings (P/E). AWS is about to get a growth jolt. And it could catch investors off-guard should demand for GB200 be stronger than expected.

Cadence Design Systems (CDNS)

Cadence Design Systems (NASDAQ:CDNS) stock has more than doubled in the past two years. With no signs of slowing down, the chip design firm stands out as one of the AI-harnessing momentum plays fit for growth investors. The stock trades at 83.3 times trailing price-to-earnings, making it one of the pricier AI stocks in this piece.

The Nvidia partnership could continue to deliver as Cadence seeks more performance gains from the very best that accelerated computing has to offer. Apart from embracing the latest and greatest Nvidia chips, Cadence also stands to benefit as it teams up with Nvidia to work on various advanced solutions across a wide range of industries. Undoubtedly, Cadence seems to be going all-in on the Nvidia platform.

As efforts begin to pay off, though, it will be interesting to see what investors’ reactions will be. Like Synopsys, CDNS stock is already incredibly expensive. As such, I’d be more interested in buying on a pullback than chasing it at all-time highs.

On the date of publication, Joey Frenette held shares of Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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