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I think it's fair to say that Nvidia (NASDAQ:NVDA) will remain the single most powerful force shaping market direction in 2024. Artificial intelligence is the most important topic in the investment world. As AI continues to evolve, it is wise to pay attention to the direction of the overall market. This means that investors need to consider stocks other than NVIDIA, which is shaping the market. AI monetization and chip pricing are both important factors to consider in relation to the broader narrative.
These are just some of the factors to consider that have the power to determine the direction of the market in 2024. Let's take a closer look at his three market-shaping stocks other than Nvidia.
Advanced Micro Devices (AMD)
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Advanced Micro Devices (NASDAQ:AMD) stock has very clearly emerged as the biggest threat to Nvidia's dominance in the AI market.
We also continue to develop our role as a market shaper from a pricing perspective. The problem is: How much market share can AMD capture from Nvidia by leveraging price-to-performance?
In other words, how much market share could AMD extract from Nvidia by developing slightly less powerful but much cheaper chips? There's plenty of evidence to suggest it could be a significant amount. there is.both meta (NASDAQ:meta) and microsoft (NASDAQ:MSFT) have already said they will switch to AMD's upcoming chips. These two companies account for about 60% of Nvidia's chip sales these days.
AMD plans to release updated chips this year. The company has an opportunity to gain significant ground simply by offering a more economical alternative to Nvidia. The question that will shape the market in 2024 is: Is NVIDIA too greedy for its own good?
Microsoft (MSFT)
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Microsoft, like Nvidia, was one of the few companies to discover early on how to monetize AI. The investment in OpenAI led to the company's stock price rising significantly throughout 2023. Then, over the next nine months or so, the company worked to implement AI into every layer of its technology stack. CEO Satya Nadella said as much in Microsoft's latest earnings report.
This was enough to send the stock soaring over the past 12 months. But questions are arising about Microsoft's strategy to shape the direction of the market in 2024. Microsoft is introducing AI into its technology stack, and that's especially true for its cloud offering, Azure. AI has increased cloud revenue. In that sense, Microsoft is very good at monetizing AI.
But early adopters of CoPilot (AI Office) are wondering if it's worth it. That begs the question of how capable Microsoft will be in terms of monetizing AI going forward. We don't know the answer, but if negative signs start to emerge, things will be very bad for MSFT stock.
Soundhound AI (SOUN)
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Soundhound AI (NASDAQ:early clouds)'s stock price has soared recently, largely due to the revelation that Nvidia is making a significant investment in the company. This makes voice-based AI more likely to be the next area investors focus on.
SoundHound AI partners with Nvidia with NVIDIA DRIVE. The result is generative AI vehicle intelligence that doesn't require cloud connectivity. In the real world, you will be able to query your vehicle regardless of your internet connection.
SoundHound AI is a leading company in the AI audio space. The company has developed a strong following, especially in call center and restaurant use cases. Our partnership with Nvidia has the potential to change the way you and I interact with our service workers. While this may be scary for some in the workforce, it also promises significant reductions in labor costs. This is one of the main reasons we believe SoundHound AI will continue to shape the direction of the market this year and beyond.
On the date of publication, Alex Sirois did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investment style focuses on long-term buy-and-hold wealth-building stock selection. He has worked in a variety of industries, from e-commerce to translation to education, and George leverages his MBA, earned from the University of Washington, to bring diverse skills to filter through his writing.
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