The Trendsetters: 3 Non-Nvidia Stocks Shaping the Market’s Direction in 2024

Stocks to buy

I think it’s fair to assert that Nvidia (NASDAQ:NVDA) will continue to be the single most powerful force in shaping the market’s direction in 2024. Artificial intelligence is the most important thematic topic in the world of investing. As AI continues to evolve, it will be prudent to pay attention to overall market direction. That means investors should also consider the non-Nvidia stocks shaping the market. Both AI monetization and chip prices are important factors to consider in relation to broader narratives.

Those are just some of the factors to consider that have the power to shape the market’s direction in 2024. Let’s get a bit more granular and look at those three non-Nvidia stocks shaping the market.

Advanced Micro Devices (AMD)

Sign of AMD office in Markham, Ontario, Canada. Advanced Micro Devices, Inc. is an American multinational semiconductor company.

Source: JHVEPhoto / Shutterstock.com

Advanced Micro Devices (NASDAQ:AMD) stock has very clearly emerged as the biggest threat to Nvidia’s dominance over the AI market. 

It is also continuing to carve out a role as a market shaper from the perspective of pricing. The question has become this: How much of Nvidia’s market share can AMD carve out by leveraging price versus performance? 

In other words, how much market share can AMD pull from Nvidia by building slightly less powerful, yet much cheaper chips? There are lots of pieces of evidence that suggest it might be a substantial amount. Both Meta (NASDAQ:META) and Microsoft (NASDAQ:MSFT) have already stated that they would switch to AMD’s upcoming chips. Those two firms accounted for roughly 60% of Nvidia’s chip sales recently.

AMD is going to release updated chips this year. The company has the opportunity to gain a lot of ground by simply offering a more economical alternative to Nvidia. The question that will shape the market in 2024 is: Is Nvidia is too greedy for its own good?

Microsoft (MSFT)

MSFT stock: A Microsoft office building

Source: gguy / Shutterstock.com

Microsoft, along with Nvidia, is one of few companies to have found ways to monetize AI early on. Its stock strengthened substantially throughout 2023 due to its investment in OpenAI. Then, over the next nine months or so, the company worked to infuse AI throughout every layer of its tech stack. CEO Satya Nadella said as much in Microsoft’s most recent earnings report.

That was enough to send shares soaring over the past 12 months. Yet, questions have emerged about Microsoft’s strategy that will shape the market’s direction in 2024. Microsoft has infused AI into its tech stack, and that is particularly applicable to its cloud offering, Azure. Cloud revenues have gotten stronger because of AI. In that sense Microsoft has been very capable of monetizing AI. 

However, early adopters of CoPilot — AI office — wonder whether it’s worth its price. That raises the question of just how capable Microsoft will be in relation to monetization of AI moving forward. I don’t know the answer but if negative signs begin to arise that will be very bad for MSFT shares.

SoundHound AI (SOUN)

SoundHound Inc.'s (SOUN) Headquarters exterior. The company develops voice-recognition, natural language understanding, sound-recognition and search technologies. Non-Nvidia stocks shaping the market

Source: Tada Images / Shutterstock.com

SoundHound AI (NASDAQ:SOUN) stock has taken off recently primarily in light of Nvidia’s revelation that it invested heavily into the firm. That raises the possibility that voice-based AI may be the next sector for investors to watch. 

SoundHound AI has partnered with Nvidia utilizing NVIDIA DRIVE. The result is generative AI vehicle intelligence that doesn’t require cloud connectivity. What that looks like in the real world is the ability to query your vehicle regardless of your internet connection.

SoundHound AI is a leading firm in the AI voice sector. The company has carved out a strong following with use cases in call centers and restaurants in particular. The partnership between it and Nvidia has the potential to change the way you and I interact with service workers. As scary as that might be for some portions of the labor force, it also promises to reduce labor costs drastically. That is one of the primary reasons to believe that SoundHound AI will continue to shape the market’s direction this year and beyond.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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