2 Stock-Split AI Stocks Up 455% and 1,150% in 3 Years to Buy Now, According to Wall Street

Chipmaker Nvidia (NASDAQ: NVDA) has been one of the biggest winners of the artificial intelligence (AI) boom. Its share price has increased 455% since August 2021, making it the second-best performing stock in the S&P 500 (SNPINDEX: ^GSPC) during the last three years. The company completed a 10-for-1 stock split in June to make shares more affordable.

Server manufacturer Super Micro Computer (NASDAQ: SMCI) has been an even bigger beneficiary of the AI boom. Its shares price has surged 1,150% since August 2021, making it the best-performing stock in the S&P 500 during the last three years. The company will reset its share price with a 10-for-1 stock split in September.

Generally speaking, Wall Street analysts believe both stocks will be profitable investments during the next 12 months. Nvidia has a median price target of $145 per share, implying 24% upside from its current share price of $117. And Super Micro has a median price target of $693 per share, implying 56% upside from its current share price of $443.

Here's what investors should know about these AI stocks.

1. Nvidia

Nvidia reported blockbuster financial results in the second quarter of fiscal 2025 (ended July 2024). Revenue increased 122% to a record $30 billion on particularly strong growth in the data center segment. Gross profit margin expanded 450 basis points , and non-GAAP earnings soared 152% to $0.68 per diluted share.

CEO Jensen Huang said, "Spectrum-X Ethernet [networking] for AI and Nvidia AI Enterprise software are two new product categories achieving significant scale, demonstrating that Nvidia is a full-stack and data center-scale platform."

Nvidia is best known for its graphics processing units (GPUs), chips that have become the industry standard in accelerating complex data center workloads such as training machine learning models and running artificial intelligence (AI) applications. Nvidia regularly sets performance records at the MLPerfs, objective benchmarks that measure the training and inference capabilities of AI systems. And the company holds more than 80% market share in AI chips, according to analysts.

However, Nvidia is truly formidable because it offers a full-stack computing platform that spans hardware, software, and services. To elaborate, the company complements its GPUs with high-performance networking equipment and central processing units (CPUs). It also provides software and services that streamline the development of AI applications. In a recent note, Jim Kelleher at Argus wrote, "Nvidia stands out because it participates in so many parts of the dynamic AI economy."

Looking ahead, Wall Street expects Nvidia's adjusted earnings to increase at 44% annually through fiscal 2026. That makes its current valuation of 53 times adjusted earnings look reasonable. Investors looking to start a position or increase their exposure to Nvidia should consider buying a few shares today.

2. Super Micro Computer

Supermicro reported mixed financial results in the fourth quarter of fiscal 2024 (ended June 30). The good news: Revenue topped estimates and surged 143% to $5.3 billion due to record demand for AI infrastructure. The bad news: Gross margin contracted 580 basis points to 11.2%, so non-GAAP earnings rose just 78% to $6.25 per diluted share. Analysts expected non-GAAP earnings to grow 132% to $8.14 per diluted share.

However, management attributed the shortfall to cost associated with ramping direct liquid cooling (DLC) manufacturing capacity. While those investments are a temporary headwind, but they should pay dividends down the road. Super Micro is already the leader in AI servers, but investments in DLC technology could help the company gain market share. Liquid-cooling is more efficient than traditional air cooling, so demand for DLC solutions should increase in lockstep with demand for AI servers, simply because AI servers generate a lot of heat.

Importantly, Super Micro expects its gross margin to normalize between 14% and 17% by the end of fiscal 2025 once DLC solutions start shipping in higher volume. That means profitability should improve in the coming quarters. CEO Charles Liang told analysts, "We are well positioned to become the largest IT infrastructure company." However, shareholders got hit with some bad news this week.

Super Micro stock tumbled 20% on Wednesday, Aug. 28, following a report from short-seller Hindenburg Research alleging "accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures." But Samik Chatterjee at JPMorgan Chase brushed the situation aside in a recent note to clients. "We see the report as largely void of details around alleged wrong doings from the company that change the medium-term outlook."

The short report from Hindenburg puts investors in a tricky position. Super Micro shares could decline further if evidence of wrongdoing comes to light. Alternatively, the stock could rebound quickly in the absence of such evidence. Personally, I think risk-tolerant investors should consider buying a very small position today. Wall Street expects Super Micro's earnings to grow at 43% annually through fiscal 2026. That estimate makes the current valuation of 20 times earnings look cheap.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends JPMorgan Chase and Nvidia. The Motley Fool has a disclosure policy .