Semiconductor company Nvidia(NASDAQ: NVDA) was the best-performing stock in the S&P 500 last year. It soared 239% as investors added shares to their portfolios in anticipation of a boom in artificial intelligence (AI) spending. That buying spree has continued in earnest this year, with Nvidia's stock advancing another 50%.
There are still plenty of reasons to own Nvidia. The company not only dominates the market for machine learning processors, but also participates in other parts of the AI economy, including networking equipment, subscription software, and cloud services. However, Wall Street currently sees more upside in Amazon(NASDAQ: AMZN) and Docebo(NASDAQ: DCBO), as detailed by the consensus price targets below:
Nvidia: $709.73 per share (implied downside of 3%)
Amazon: $207.92 per share (implied upside of 23%)
Docebo: $59.50 per share (implied upside 30%)
The most prudent way to benefit from AI is to buy a basket of stocks. Here's why investors should consider including Amazon and Docebo in their AI baskets.
1. Amazon
Amazon is a multifaceted business with compelling growth prospects in e-commerce, digital advertising, and cloud computing. It operates the most popular online marketplace in the world as measured by monthly visitors, and it continues to gain revenue share in North America and Western Europe. Moreover, while Alibaba currently leads the market in gross sales, Morgan Stanley expects Amazon to displace the company by 2027.
Building on that, Amazon's strength in retail has evolved into a booming advertising business. Its unparalleled ability to engage shoppers and source data helps media buyers reach consumers with relevant campaigns. As a result, Amazon has steadily gained share in digital ad spending for several years, becoming the third-largest ad tech company, even as the leaders Alphabet and Meta Platforms have lost ground. Analysts at Insider Intelligence expect similar results in the future.
Finally, Amazon Web Services (AWS) is the leader in cloud infrastructure and platform services. Its 31% market share in the fourth quarter easily topped Microsoft's 24% market share and Alphabet's 11% market share, according to Synergy Research Group. That alone positions AWS as a probable beneficiary of AI, simply because cloud infrastructure is often the easiest way to run AI applications.
However, consultancy Gartner has also recognized AWS as a leader in artificial intelligence developer services, and the company recently bolstered its position in that market with Bedrock, a new service that helps developers build generative AI applications.
Here's the bottom line: Retail e-commerce sales are projected to increase at 8% annually through 2030, while the ad tech and cloud computing markets are forecasted to grow at 14% annually. That gives Amazon a good shot at double-digit sales growth through the end of the decade, but its bottom line should increase more quickly as its high-margin businesses (i.e., advertising and cloud computing) account for more of total sales.
Indeed, Wall Street expects earnings per share to grow at 30% annually over the next five years. In that context, Amazon's current valuation of 59 times earnings actually looks very reasonable. Patient investors should consider buying a small position in this stock today.
2. Docebo
Docebo provides a multi-product learning management system (LMS) that helps businesses create, deliver, and measure outcomes from training courses across internal (employee) and external (customer) audiences. One particularly innovative application is Docebo Shape. It uses generative AI to automate content creation, turning source material like corporate documents, presentations, and case studies into training material.
Fosway Group, a leading analyst of human resources technologies in Europe, has recognized Docebo as a leader in the LMS market for six straight years. Meanwhile, Morgan Stanley selected Docebo as a top generative AI stock in 2024. In a note to clients, analysts at the firm said Docebo is (1) taking share from legacy vendors in internal LMS use cases and (2) leading the LMS market in external use cases.
Meanwhile, Docebo is still advancing its generative AI capabilities. The company has announced new features coming to Shape this year, including virtual role-play with real-time feedback and an integrated copilot that further simplifies the creation of learning content. Management says, "Shape will fundamentally change how training material is created and consumed."
According to Grand View Research, LMS spending will increase by 20% annually through 2030, but Docebo's strong market presence should translate into above-average growth. Indeed, Wall Street expects the company to grow sales at 25% annually over the next five years. That consensus forecast makes its current valuation of 9 times sales look cheap, especially when the three-year average is 13.9 times sales.
Docebo may not be a familiar name for many investors, but the company has a strong presence in the LMS market, and it's using generative AI to help customers more easily create learning material. That makes Docebo a worthwhile addition to a broader basket of AI stocks.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Docebo, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Alibaba Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
