If you missed out on the glorious multi-year rise in shares of Nvidia (NASDAQ: NVDA), it’s probably a better idea to focus your efforts on where the puck is heading next. Nvidia may still have enough room to rise even further, but for a firm that could find itself flirting with a $5 trillion market cap, I think it’s safe to say that the easy money has already been made. And, as is to be expected by a firm that’s rocketed up the valuation ladder, the downside risks are notable, especially if AI demand ends up being just a tad shy of expectations.
Indeed, it looks as if Nvidia’s chips are not selling like hotcakes; there’s potential for a drastic correction. If you believe AI is in a bubble, perhaps there are less risky places to grow one’s wealth. In this piece, we’ll look at two other AI stocks that I think are cheaper and worthier of buying right now.
Source: Getty Images
Celestica
Celestica (TSX: CLS) is one of the biggest Canadian AI winners in the past year, gaining more than 132% in the past year and around 730% in the last two years. Of course, this momentum is Nvidia-like, but the big difference is that Celestica is a company that’s worth just shy of $50 billion, leaving ample runway for long-term growth.
As the AI boom powers demand for all the stuff that goes inside a data centre (think high-performance servers and network switches), Celestica is bound to continue to keep rising up the ranks. While the valuation is tough to get behind at 44.1 times trailing price-to-earnings (P/E), I do think the firm is a standout “first mover” whose advantages could unlock next-level growth for a while longer.
Given that, the seemingly “overvalued” equipment maker may actually prove cheap, especially if its earnings dictate the trajectory of the share price. Of course, CLS stock won’t be for everyone, but if you can handle the volatility, I think it’s one of the better growth stocks in the country.
Apple
Apple (NASDAQ: AAPL) stock still doesn’t get much credit as the firm looks to catch up and pull ahead in AI. In fact, I’d give the Mag Seven titan more benefit of the doubt, as smaller language models look to be shrunk down enough to run on a device without as many compromises. Of course, smaller models aren’t going to take the spot of large models anytime soon, even for consumers with simple requests. I believe that there are use cases for both. Either way, I think Apple’s ready to dominate in AI as it unlocks the best of both worlds. For simpler, private requests, running on the device is the way to go.
And if a more capable model is needed? Sending the request to a private cloud (Private Cloud Compute) seems like the smart way to go. As we enter an era of AI ads (did you see those Claude Superbowl commercials?), we could see a massive shift towards privacy-focused AI.
Will ChatGPT with ads cause the masses to shift to Apple’s intelligence by the end of the year? Time will tell. But I would give Apple the “edge” when it comes to AI in 2026. And for that reason, I find AAPL shares to be a solid AI pick for the long haul, even at 35.2 times trailing P/E.
