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With the attention artificial intelligence (AI) is getting, it's easy to focus on Nvidia as a top tech stock. It's a great pick and has performed incredibly well, but there are other stocks that look more attractive right now.
Three that I have my eye on are Taiwan Semiconductor Manufacturing (NYSE: TSM), Meta Platforms (NASDAQ: META), and Procore Technologies (NYSE: PCOR). I think they all offer a great compromise between growth and value, and are far better buys than Nvidia today.
Taiwan Semiconductor Manufacturing
Taiwan Semiconductor, or TSMC for short, is the largest contract chip manufacturer in the world. It takes designs from giants like Nvidia and Apple and produces them, making it a winner regardless of which company is ahead in the AI race.
TSMC is at the cutting edge of technology. It has market-leading 3 nanometer (3nm) chips and is already working on its next-generation 2nm chips. These chips can be configured to offer more computing power or be more efficient.
With the computing power of existing technology already impressive, it's more likely that TSMC's clients will choose more-efficient versions, especially since the input costs for AI computing hardware are so high. This could drive even more demand for its chips, making the stock a strong buy.
Management projects 15% to 20% compound annual revenue growth, which gives it the potential to be a market-crushing stock. With shares still down around 10% from their July highs, now is a great time to buy.
Meta Platforms
Meta Platforms is the parent company of Facebook, Instagram, Threads, WhatsApp, and Messenger. It also has its Reality Labs division, which offers products like virtual reality headsets.
But all investors really need to focus on is its advertising business on its social media sites, which accounts for 98% of revenue. Meta investors just have to learn to balance the benefits of advertising with the high unprofitability of Reality Labs.
Holistically, Meta is truly an impressive business: 38% operating margins with 22% revenue growth. Those are fantastic metrics, yet the stock trades for 24 times forward earnings. Considering that the S&P 500 as a whole trades for 23 times forward earnings, it's a real bargain because its business is far better than the average S&P 500 constituent.
Meta is slated to continue its social media dominance, and if one of its Reality Labs products becomes a hit, the stock could be a massive winner.
Procore Technologies
Procore is a name you might not have heard of, but its construction management software is revolutionizing the industry. Unlike nearly every other sector that went through a software revolution over the last decade, the construction industry has only recently benefited from widespread cellular connectivity.