Investors seem to be crazy about artificial intelligence (AI) stocks these days, and one of the most adept companies to capitalize on this trend is Nvidia (NASDAQ: NVDA). The role that Nvidia’s AI chips play in making the technology a reality goes a long way toward justifying this excitement.
However, the problem with investing in Nvidia right now is its monstrous size and high valuation. With a price-to-sales ratio (P/S) of 39 and a market cap of $3.1 trillion, you might rightly wonder whether Nvidia can maintain its growth rate.
Fortunately, investors have alternatives as there are other AI stocks available at lower prices and market caps. A quick search should lead investors to this Advanced micro devices (NASDAQ: AMD) And UiPath (NYSE: PAD). Let’s take a closer look at these two AI stock alternatives.
1. AMD
One AI stock that has been a bit of a surprise to investors is AMD. Granted, the maker of CPUs, GPUs and embedded chips was already doing well after bouncing back from the brink of bankruptcy a decade ago with the help of then-new CEO Lisa Su. It had even scored some wins in GPUs and gaming, becoming the chip supplier of choice for video game platforms like Microsoft‘s Xbox and the Sony Play station.
But then came the AI ​​wave and thanks to AI chip offerings, the data center segment managed to increase revenue by 80% year-on-year in the last quarter.
AMD’s AI chip technology lags behind Nvidia’s, but overwhelming demand caused supply issues with Nvidia’s AI chips and lower prices for AMD’s chips helped the semiconductor specialist boost sales.
The increased AI-related sales are helping AMD offset slowing sales in its gaming and embedded segments. Amid these achievements, AMD’s total revenue for the first quarter of 2024 was $5.5 billion, a year-over-year increase of just 2%.
Still, the revenue numbers offer some hope. In the first quarter, data center revenue was 43% of total revenue, which closely resembles Nvidia’s revenue situation in fiscal 2022, when data center revenue was 39% of the company’s total revenue. By the first quarter of Nvidia’s fiscal 2025 (ending April 28), that percentage of total revenue had grown to 87%.
AMD cannot guarantee that its data center segment will account for the same high percentage of its revenue as Nvidia’s in two years. Nevertheless, if semiconductor stocks can follow this path to some extent, investors could see earnings rise significantly. Such a prospect could prompt investors to overlook AMD’s price-to-sales ratio of 11 and buy more shares.
2. UiPath
Another possible opportunity in this industry is UiPath. UiPath is one of the leading robotic process automation (RPA) companies, specializing in software robots designed to perform repetitive tasks.
Despite a relatively small market cap of $6.8 billion, the robotics stock stands out from much larger competitors thanks to a developer community of 2.5 million members. This brings a large number of developers under its ecosystem, which makes switching to an alternative RPA product more difficult.
Estimates vary depending on the growth of the RPA market, but a more conservative estimate from Fortune Business Insights expects the industry to grow at a compound annual growth rate of 20% through 2030.
Unfortunately, this company also faces some major challenges. CEO Rob Enslin, who served as co-CEO for two years, suddenly resigned after serving as sole CEO since January. Co-founder Daniel Dines is back in charge of the company, but that still doesn’t address longer-term uncertainties over top leadership.
The financial figures cannot be inspiring at the moment either. Revenue for the first quarter of 2025 (ended April 30) was $335 million, a year-over-year increase of 16%. Unfortunately, the net loss of $29 million did not improve significantly from the $32 million loss in the prior year quarter.
However, with stock-based compensation costs of $89 million, the losses are driven by non-cash expenses. This shows that the company is meeting its operating costs.
Moreover, the P/S ratio is 5, almost an all-time low. So if investors are looking for a cheap AI stock and they can deal with some (hopefully) near-term uncertainty, they may have a lucrative opportunity in UiPath stock.
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Will Healy holds positions in Advanced Micro Devices. The Motley Fool holds positions in and recommends Advanced Micro Devices, Microsoft, Nvidia, and UiPath. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
Forget Nvidia: 2 Artificial Intelligence (AI) Stocks to Buy Instead was originally published by The Motley Fool
