Nvidia (NASDAQ: NVDA) stock has gained more than 1,000% over the past five years, giving it a total return more than 10 times as great as the S&P 500 over that period. It now accounts for about 8% of the famed index’s value, so its performance plays a big role in how well the broad market benchmark performs.
However, investors in search of higher future returns may want to gravitate toward smaller artificial intelligence (AI) stocks. These companies don’t need as much investor capital to generate meaningful price movements compared to Nvidia, with its $5 trillion market cap.
In my view, these three smaller AI companies have what it takes to outperform Nvidia stock over the next five years.
Sandisk, Nebius, and AMD look poised for further rapid growth.
Nvidia (NVDA +4.30%) stock has gained more than 1,000% over the past five years, giving it a total return more than 10 times as great as the S&P 500 over that period. It now accounts for about 8% of the famed index’s value, so its performance plays a big role in how well the broad market benchmark performs.
However, investors in search of higher future returns may want to gravitate toward smaller artificial intelligence (AI) stocks. These companies don’t need as much investor capital to generate meaningful price movements compared to Nvidia, with its $5 trillion market cap.
In my view, these three smaller AI companies have what it takes to outperform Nvidia stock over the next five years.
Image source: Getty Images.
Sandisk
Nvidia’s GPUs can provide the processing power required to handle intense AI workloads, but to be effective, they also need memory storage solutions like the ones Sandisk (SNDK +6.16%) provides. Sandisk develops and manufactures NAND flash memory chips that go inside AI chips and platforms like the new Vera Rubin architecture.
Sandisk
Today’s Change
(6.16%) $57.47
Current Price
$989.90
While Sandisk faces some competition, it’s a pretty small field. The top five NAND flash memory manufacturers control more than 90% of the global NAND market. This hardware’s importance to the AI build-out, combined with limited competition, is part of the reason why Sandisk is up by roughly 3,000% over the past year.
Recent financial results suggest that its rally can continue. The company delivered 61% year-over-year revenue growth in its fiscal 2026 second quarter (which ended Jan. 2), and 672% net income growth. These results indicate that Sandisk’s profits are growing faster than Nvidia’s. Its 31% sequential growth was also better than the 20% sequential growth Nvidia delivered in its fiscal 2026 Q4 (which ended Jan. 25).
Sandisk’s guidance calls for $4.6 billion in fiscal Q3 revenue at the midpoint, implying 52% sequential growth. A key part of the AI boom, the company is growing faster than Nvidia but trades at a lower forward price-to-earnings (P/E) ratio. Sandisk is one of the few stocks that has more going for it despite producing a 30x return within one year.
Nebius
Nebius (NBIS 6.31%) is a neocloud provider that supplies tech companies with capacity at AI data centers. It expects to wrap up 2026 with more than 3 gigawatts of secured power, and as much as 1 gigawatt of connected power. It ended 2025 with 170 megawatts of active data center power, so as its build-out proceeds to allow it to convert that potential into operating data center infrastructure, Nebius will be able to generate substantially more recurring revenue.
Nebius Group
Today’s Change
(-6.31%) $-9.92
Current Price
$147.16
For instance, Nebius signed a five-year, $17.4 billion deal with Microsoft (MSFT +2.11%) for 300 megawatts of computing power in its Vineland, New Jersey, data center. Microsoft also has the option to obtain additional capacity that would increase the deal’s value to $19.4 billion.
The company also confirmed two five-year deals with Meta Platforms (META +2.48%) that come to $12 billion and $15 billion, respectively. The total number of megawatts involved in the deals was undisclosed, but they demonstrate the high demand for Nebius’ AI infrastructure from hyperscalers.
To top it all off, this isn’t the first time Meta Platforms has done business with Nebius. The two companies reached a smaller $3 billion deal over five years near the end of 2025.
Advanced Micro Devices
Advanced Micro Devices (AMD +13.85%) is a graphics processing unit (GPU) chipmaker just like Nvidia. While Nvidia is the clear leader in the industry, AMD is delivering robust growth too, and the stock is, relatively speaking, a hidden gem.
AMD’s revenue rose by 34% to a new record in its fiscal 2025. Management expects a lot more, based on its stated goal of achieving a compound annual growth rate (CAGR) of more than 35% for the next several years. That goal aligns with AMD’s broader objective of leading the $1 trillion compute market. A major part of that growth projection involves it hitting a 60%-plus revenue CAGR for its data center business.
That projected growth rate would be an improvement from AMD’s five-year revenue CAGR of 28.8%. That history shows long-term growth, and the rising demand for AI infrastructure can support AMD’s ambitious goals. AMD’s profit margins have been rising in recent quarters and reached 14.7% in Q4. Rising profits give investors immediate benefits as the long-term path to a 35% CAGR plays out.
