Investors seem to love artificial intelligence (AI) stocks these days, and one of the most adept companies at capitalizing on this trend is Nvidia (NVDA -0.36%). The role that Nvidia's AI chips play in making the technology a reality justifies this excitement to a significant extent.
The problem with investing in Nvidia at this point though is its monstrous size and elevated valuation. At a 39 price-to-sales (P/S) ratio and a $3.1 trillion market cap, one would be right to wonder whether Nvidia can maintain its growth pace.
Fortunately, investors have alternatives as there are other AI stocks available at lower prices and market caps. A quick search should lead investors to Advanced Micro Devices (AMD 1.72%) and UiPath (PATH). Let's take a closer look at these two AI stock alternatives.
1. AMD
One AI stock that has been a bit of a surprise for investors is AMD. Granted, the maker of CPUs, GPUs, and embedded chips was already doing well after bouncing back from the brink of bankruptcy a decade ago with the help of then-new CEO Lisa Su. It had even claimed some victories on the GPU and gaming fronts, becoming the chip provider of choice for video game platforms like Microsoft's Xbox and the Sony PlayStation.
But then came the AI wave and its AI chip offerings helped its data center segment boost revenue 80% year over year in the latest quarter.
AMD's AI chip technology lags behind Nvidia's, but the overwhelming demand created supply issues with Nvidia's AI chips and lower prices for AMD's chips helped the semiconductor specialist increase sales.
Its increased AI-related sales are helping AMD counterbalance slowing sales in its gaming and embedded segments. Amid that performance, AMD's overall revenue for the first quarter of 2024 was $5.5 billion, a year-over-year increase of only 2%.
Still, its revenue numbers offer some hope. In Q1, data center revenue was 43% of overall revenue, closely resembling Nvidia's revenue situation in fiscal 2022, when its data center revenue was 39% of the company's total revenue. In the first quarter of Nvidia's fiscal 2025 (ended April 28), that percentage share of overall revenue had grown to 87%.
AMD cannot guarantee that its data center segment will make up the same high percentage of its revenue as Nvidia's in two years. Nonetheless, if the semiconductor stock can follow that path to some degree, investors could see revenue moving significantly higher. Such a prospect could prompt investors to overlook AMD's price-to-sales ratio of 11 and buy more of its stock.
2. UiPath
Another possible opportunity in this industry is UiPath. UiPath is one of the leading robotics process automation (RPA) companies, specializing in software robots designed to handle repetitive tasks.
Despite a relatively small $6.8 billion market cap, the robotics stock stands out from much larger competitors thanks to a 2.5 million-member developer community. This brings a large number of developers under its ecosystem, which makes switching to an alternate RPA product more difficult.
Estimates vary on the growth of the RPA market, but a more conservative estimate by Fortune Business Insights projects the industry will grow at a 20% compound annual growth rate through 2030.
Unfortunately, this company also faces some significant challenges. CEO Rob Enslin, who had served as co-CEO for two years, suddenly resigned after serving as the sole CEO since January. Co-founder Daniel Dines is back in charge of the company, but that still does not address the longer-term uncertainties about its top leadership.
Its financials may also fail to inspire at the moment. Revenue for the first quarter of 2025 (ended April 30) was $335 million, a year-over-year increase of 16%. Unfortunately, its net loss of $29 million did not improve significantly from the $32 million loss in the year-ago quarter.
However, with stock-based compensation expenses at $89 million, its losses are driven by a noncash expense. This shows it is meeting its operational expenses.
Moreover, its P/S ratio is 5, near all-time lows. Hence, if investors are looking for an inexpensive AI stock and they can handle some (hopefully) short-term uncertainty, they might have a lucrative opportunity in UiPath stock.
