Nvidia (NASDAQ:NVDA) has performed remarkably, rising over 1,000% in the past five years, resulting in a total return of more than tenfold. It contributes about 8% to the S&P 500 index, significantly influencing the overall market performance.
That said, investors looking for potentially higher returns might want to explore smaller A.I. AI) stocks. These smaller companies typically require less capital to see meaningful stock movements compared to Nvidia, which boasts a market cap of around $5 trillion.
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Personally, I believe that a few smaller AI firms are well-positioned to outperform Nvidia over the next five years.
Nvidia’s GPUs are powerful enough to manage demanding AI tasks, but they also need solid memory solutions. Companies like SanDisk (NASDAQ:SNDK) provide these solutions, with SanDisk focusing on developing internal NAND flash memory chips.
While SanDisk does face some competition, it operates in a relatively concentrated market; the top five NAND flash manufacturers account for over 90% of global production. This limited competition, combined with the growing hardware demand for AI, is a key factor behind SanDisk’s impressive 3,000% increase last year.
Recent earnings reports indicate that this trend may persist. In the second quarter of fiscal 2026 (ending January 2), SanDisk reported a revenue increase of 61% year-over-year and a net income boost of 672%. These numbers suggest that SanDisk’s profits are climbing faster than Nvidia’s, with 31% sequential growth outpacing Nvidia’s 20% during the same timeframe.
Looking ahead, SanDisk is projecting third-quarter revenue of $4.6 billion, which would represent a 52% increase quarter-over-quarter. This positioning as an important player in AI growth could allow SanDisk to continue its strong performance, especially given its lower forward price-to-earnings ratio compared to Nvidia.
Nevius (NASDAQ:NBIS), meanwhile, is a cloud service provider focused on supplying AI data center capacity. By 2026, it aims to deliver over 3 gigawatts of secure power, alongside 1 gigawatt of additional connected power. With plans to expand its active data center capacity significantly, Nevius could see a marked increase in recurring revenue.
For instance, Nevius has also secured a five-year contract worth $17.4 billion with Microsoft (NASDAQ: MSFT) for a data center in Vineland, New Jersey, which provides 300 megawatts of computing power. Interestingly, Microsoft holds an option to extend this to $19.4 billion if more capacity is needed.
Additionally, Nevius has struck deals with Meta Platforms (NASDAQ:Meta), amounting to $12 billion and $15 billion, respectively, showcasing the high demand for its AI infrastructure services.
Moreover, this collaboration isn’t new; Meta previously partnered with Nevius for a smaller five-year deal totaling $3 billion.
Advanced Micro Device (NASDAQ: AMD), a GPU maker, operates in Nvidia’s shadow but is also witnessing solid growth, making it a notable player in the market.
AMD’s revenue surged by 34%, establishing a new record for the fiscal year 2025. Management predicts even further growth, aiming for a compound annual growth rate (CAGR) of over 35% in the forthcoming years. This aligns with AMD’s broader goal to dominate the expanding $1 trillion computing market, buoyed by an expected CAGR of over 60% in the data center segment.
If things go according to plan, this growth projection could surpass AMD’s historical five-year CAGR of 28.8%. With rising AI infrastructure demand, AMD’s ambitious goals seem attainable. Recent quarters have also seen an uptick in AMD’s profit margins, reaching 14.7% in the fourth quarter, which could soon yield benefits for investors.
Before considering an investment in SanDisk, there are a few points worth contemplating:
According to Motley Fool Stock Advisor, the analyst team has highlighted ten stocks they believe can deliver strong returns in the upcoming years—but SanDisk isn’t included among them. These alternative picks have exhibited impressive potential.
For instance, anyone who invested $1,000 in Netflix back on December 17, 2004, would have seen that grow to $498,522. Similarly, an investment in Nvidia made on April 15, 2005, would now be worth $1,276,807.
It’s also worth noting that the stock advisor program boasts a total average return of 983%, considerably outperforming the S&P 500’s return of 200%. If you’re interested in finding out more about top stock picks, consider joining this investing community formed by retail investors, for retail investors.
*Stock Advisor returns are as of April 27, 2026.
Marc Guberti holds no positions in any of the stocks mentioned, but The Motley Fool has investments in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, and Nvidia.
3 AI stocks that may outperform Nvidia in the next five years
