Nvidia has made an incredible rise to become the most valuable publicly traded company in the world, but its 11% year-to-date return looks dull compared to some of the other AI stocks that have made headlines in recent months.
The three growth stocks on this list are all involved in building out AI infrastructure and have all outperformed Nvidia so far this year. They also appear well-positioned to continue their rallies and surpass them in 2027.
Did you miss Nvidia 2009? This rare signal flashes again. In 2009, a “double down” signal flashed for a little-known chip maker called Nvidia. For the first time in years, the same “Total Conviction” signal is flashing for a company one hundredth the size of Nvidia. Carry on”
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Table of Contents
1. Monolithic energy systems
Monolithic energy systems (NASDAQ: MPWR) makes power management systems that enable data centers to maintain continuous uptime without overloading AI chips. Power management systems work hand in hand with liquid cooling solutions to keep chips and servers cool.
The stock is up more than 40% year-to-date as AI data center demand for the company’s products has increased. Monolithic Power Systems’ first-quarter revenue rose 26.1% year-over-year, and net income grew slightly faster.
While the company lists six business segments in its earnings results, two of them are taking the brunt. Company data is the most important. It accounted for about a third of total sales and almost doubled year-on-year. This division deals with energy management and integrated solutions for AI chips and servers.
The communications segment is the other major segment. This division focuses on telecommunications infrastructure, satellite systems and network equipment. Thanks to the AI tailwind, revenue grew 55.5% year-over-year and 33.1% quarter-over-quarter. It accounts for 14% of total sales.
As these two high-growth divisions gain market share, Monolithic Power Systems should see accelerated revenue growth. That should put the stock in position to outperform Nvidia again in 2027.
2. Astera Labs
One week Laboratories (NASDAQ: ALAB) develops rack-scale connectivity hardware and software for AI servers. Many hyperscalers turn to the company for connectivity solutions that enable faster data transfer between AI chips and server clusters.
Its revenue growth rates should prompt investors to take a closer look at the company. Revenue nearly doubled year-over-year in the first quarter, and the 14% sequential growth rate shows solid momentum. In the AI hardware space, double-digit sequential revenue growth rates have become more common; For example, such a trend preceded micronThe incredible share price rise.
The story continues
Management’s forecasts already point to significant growth from here. The midpoint of second-quarter revenue guidance of $360 million implies sequential growth of 16.7%. However, if recent history is any indicator, the actual growth rate could be closer to 20%. Astera Labs told investors to only expect up to $297 million in first-quarter revenue, but it still delivered $308.4 million.
Although the stock has nearly doubled this year, it is also about 33% below its peak in recent weeks, presenting a good opportunity to buy on the dip.
3. Cadence design systems
Cadence design systems (NASDAQ: CDNS) is off to a slower start than the other AI stocks on this list. It’s up nearly 20% this year, driven by successes in electronic design automation software and hardware at chipmakers. These solutions enable companies like Nvidia And Advanced micro devices to test and build semiconductors before sending their designs to the outside foundries that manufacture them.
Its growth rates are more moderate than the other two picks, but the company has a record backlog of $8 billion. Cadence Design Systems also told investors it expects revenue to grow 17% in 2026.
Agentic AI should give the company a big tailwind. Its technology facilitates the development of advanced AI chips that can handle more demanding workloads than those currently used in data centers. That makes it an important control point for AI chips, and this market can support revenue growth and profit margin expansion, which in turn would make the stock more attractive.
Should you buy Monolithic Power Systems shares now?
Before you buy shares of Monolithic Power Systems, consider the following:
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Marc Guberti does not hold a position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Cadence Design Systems, Micron Technology, Monolithic Power Systems, and Nvidia. The Motley Fool recommends Astera Labs. The Motley Fool has one Disclosure Policy.
“3 AI Stocks That Can Surpass Nvidia Next Year” was originally published by The Motley Fool
https://finance.yahoo.com/markets/stocks/articles/3-ai-stocks-outperform-nvidia-215600814.html
