Palo Alto Networks or Nvidia?

The technological sale of 2025 has created several opportunities for purchase. Last year, valuations for countless technology companies went through the roof, which made it difficult for negotiation. If you have been waiting for the right time to enter or add to your positions, now it could be this time.

In particular, two iconic companies have seen their actions prices reduce so far: Palo Alto Networks (NASDAQ: PANW) and Nvidia (NASDAQ: NVDA). The two companies have convincing investment theses at the moment, but one is higher with a longer long term.

Before jumping towards which it is a better purchase, it is important to first understand the critical differences between the business model of each company.

Nvidia is mainly a chip maker she produces Graphic processing unitscommonly known as GPU. GPUs are specialized chips that make a lot of technologies possible: everything, from games and editing photographs to learning applications for artificial engine and intelligence (AI). In a nutshell, Nvidia is one of the main suppliers of critical components for a wide range of large and growing industries, the AI industry is the most promising today.

Meanwhile, Palo Alto Networks can be thought of as a cybersecurity company. Its software offers network security, cloud security and a number of other security products aimed at protecting companies from bad actors. Its product suite is impressive, with more than 80,000 business customers worldwide, with billions of protected points.

Both GPU and cybersecurity are final markets. This is evidenced by the premium assessment of each company. Nvidia shares the trade 20.6 times sales compared to 14 times sales for Palo Alto networks. But before thinking that Palo Alto Networks is the cheapest stock, it is important to check the growth rates of each business. Wall Street analysts wait for Nvidia to grow besides 4 times Faster than Pal Alto Networks next quarter. Nvidia also has significantly higher benefit margins, helped by their better class chips than clients, especially AI customers, demand above almost all competitors.

Due to the highest growth rates of Nvidia, actions sell only 13 times sales, only a small premium for sales assessment of 12.2 times forward by Palo Alto Networks. When you add your much higher benefit margins, Nvidia looks like the winner clear today. But there is another reason that Nvidia is a fantastic bet in the coming years, or even the next decades.

PS NVDA proportions graph — NVDA PS ratio data for Ycharts.

Nvidia is not just mounting the wave wave to growth. The company invested in IA, that is, its chips overcome the performance of competitors for this application many years ago. In fact, it was the launch of Cuda de Cuda, its property of unified calculation devices, in 2006, which has probably given Nvidia the edge it maintains today when it comes to chip performance and a global market share.

Cuda’s main advantage was that it allowed developers to customize NVIDIA chips easily and quickly for their specific applications. This improved the performance, sometimes significantly. More important, he attracted these customers to the Nvidia ecosystem, which made it harder to change the GPU of a competitor.

Nvidia’s dominant position in GPU, especially those used for AI and cloud calculation applications, is no accident. Early investments and blocking Cuda vendors should provide the company a lasting competitive advantage not usually seen in the developing technology sector quickly. After the shooter, Nvidia’s assessment, especially compared to other technological actions such as Palo Alto Networks, looks too good to pass. Investors should wait for continuous volatility, but now it seems to be a fantastic time to take a long -term position in a blue chip business aimed at one of the largest growth markets of this century: Alas.

Before buying shares in Nvidia, consider this:

It Motley Fool Stock Exchange Advisor The analyst team just identified what they think are the 10 best stocks For investors to buy now … and nvidia was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Think about when Netflix Made this list on December 17, 2004 … if you invested $ 1,000 at the time of our recommendation, you would have 461,558 $!* Or when Nvidia Made this list on April 15, 2005 … if you invested $ 1,000 at the time of our recommendation, you would have $ 578,035!*

Now it’s worth noting Value AdvisorThe total average profitability is 730%: a higher market performance compared to 147% For the S&P 500. Do not miss the most recent list of 10 Top, available when you join Value Advisor.

See 10 stocks »

*The Bag Minister returns from April 4 2025

Ryan Vanzo It has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Nvidia. The Motley Fool recommends Palo Alto Networks. The mold’s fool has a Outreach policy.

Which NASDAQ Sale Stock is cheaper: Palo Alto Networks or Nvidia? was originally published by Motley Fool

Source link