Nvidia will continue to amaze Wall Street and investors in 2023. But portfolio managers warn that the excitement should not overshadow the other AI winners. Nvidia stock has soared 232% in nine months, reached all-time highs, and attracted bullish attention from Wall Street’s biggest investment firms. It also topped a $1 trillion valuation and shocked the world with consecutive blowout AI quarters. Paul Meeks is the portfolio manager of Independent Solutions Wealth Management. He said that “the strong tend to get stronger” as they go through transitions and themes. You’ll always find a company that appears out of nowhere. Nvidia’s quarter report left some investors wondering if any serious competitors can challenge the well-protected Nvidia throne or catch up with speed in building comparable chips that are able to drive generative AI models. The price movement seemed to indicate a rotation away from these popular names. On August 24, the day after Nvidia announced another record-breaking quarter, Intel, Advanced Micro Devices, Broadcom, and Marvell Technology all fell 4%, 7.5%, 2.5%, and 6.9% respectively. Nvidia managed to make a modest gain despite a general market decline that day. NVDA YTD Mountain Nvidia shares more than doubled by 2023. Investors and portfolio managers agree that Nvidia will not be the only AI player in the market forever. Kim Forrest, Bokeh capital partners, said, “I don’t see any obvious competition, but there’s this thing called the New where someone goes, ‘Hey, let’s do it this other way,'”. It completely sweeps under the rug somebody else, and this is only the area where they do it.” The strong become stronger. Last month, Nvidia achieved the unthinkable by exceeding quarterly expectations for a second consecutive period and issuing strong guidance for this period that was nearly above analyst expectations. The stock ended marginally higher despite another breakthrough quarter. Meanwhile, peers were selling off. Forrest noted that some retail and professional investors interpreted the news as an indication that the “game was over” for other AI chipmakers. While Nvidia has definitely taken the steam out of other players, the news is not necessarily bad for the rest. She said, “It’s too early to make a prediction but I think a lot investors will decide to reduce their other semiconductor holdings to Nvidia because they believe the strong will only get stronger.” Forrest is on the lookout for growth at an affordable price. He points out companies such as Advanced Micro Devices and Micron Technology. Forrest, at this stage, is looking for software companies that are poised to grow. AMD MU YTD Mountain AMD and MU by 2023 Meeks suggested that investors who are interested in investing in AI may want to stick to pure-play winners such as Nvidia. However, investors should not overlook Advanced Micro Devices, which will be releasing a competitive AI processor in the next few months. Wall Street sees Advanced Micro Devices, but Meeks does not think the company will overtake Nvidia anytime soon. Meeks suggests Broadcom, Marvell Technology, and Taiwan Semiconductor, which is a major Nvidia supplier, as ways to profit from the AI chip trend. Broadcom shares fell during the Friday session, after the networking equipment chipset maker shared its in-line guidance. Its CEO also sought to temper AI expectations. JoAnne Feney of Advisors Capital Management, which owns Broadcom, Nvidia, and AMD, said that the comments were made to avoid an increase in its multiple. However, AI is a major factor for its growth. She also mentioned the company’s collaboration with Google to develop its tensor processor units, which power AI. Feeney believes that AI is likely to change the way companies operate, and will be a major growth driver in the long term for Nvidia’s share price and the company. She said it is unclear how long the major growth phase will last and whether this pattern of blown-out guidance will continue. She said that the stock was already very valuable and incorporated a large part of this growth outlook. Let’s wait and see what they can deliver in the next few months and how persistent this growth will be over the next couple of years. “