Nvidia's AI Revolution Faces Risks; Meta and Baidu Offer Cheaper Alternatives
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Nvidia is considered the face of the AI revolution, but may be in a bubble due to overestimated adoption, incoming competition, and reduced pricing power.
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Instead of Nvidia, consider investing in Meta Platforms, which uses AI but has strong core social media assets and financials to withstand any AI bubble bursting.
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Also consider Baidu, which uses AI but relies mainly on its dominant search engine business in China and has a strong cash position to weather turbulence.
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Meta and Baidu stocks trade at cheaper earnings and cash flow multiples compared to Nvidia.
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Historically, next big thing investments like AI go through an early bubble stage with overestimated growth that eventually pops.