Another quarter, another report of jaw-dropping sales. That’s been a recurring story with Nvidia (NASDAQ: NVDA). The demand for the company’s artificial intelligence (AI) chips shows no signs of slowing down.
Does this make Nvidia the best AI stock to buy right now? I don’t think so. My favorite AI stock could give investors a better chance of making even more money over the next few years.
A perhaps surprising choice
You might think I would pick one of the mega-cap cloud providers — Google parent Alphabet, Amazon, Microsoft, or perhaps even Oracle. AI should provide a massive tailwind for years to come for all of them. I like all of these stocks, but none of them is my current AI favorite.
Instead, my choice is perhaps surprising. It’s UiPath (NYSE: PATH). While all of the aforementioned stocks are performing well so far in 2024, UiPath’s shares have fallen more than 20%.
Many investors may be unfamiliar with UiPath. The company has been in business since 2005, but it has only traded publicly since April 2021. UiPath develops software used in automating business processes. It started out focusing on robotic process automation (RPA) and now has an end-to-end AI-powered business automation platform.
UiPath is a molehill to Nvidia’s mountain. Its market cap is only around $10.8 billion. The company generated revenue of $1.3 billion in its fiscal year ending Jan. 31, 2024. That’s practically pocket change for Nvidia, which raked in 20 times that amount in the first quarter alone.
What I like about UiPath
So why is UiPath my favorite AI stock to buy right now? There are several reasons. Its small size is definitely a plus in my view. It could be tough for Nvidia to deliver another 10x return because it’s already so huge. UiPath, though, might be in a better position to pull off such an impressive gain.
Cathie Wood’s Ark Invest projects the AI software market could expand by a compound annual growth rate (CAGR) of 42% and reach $14 trillion by 2030. Granted, this number includes more than just the AI business automation software that UiPath markets. However, it underscores…
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