Navitas Semiconductor Is Flashy. This Boring AI Stock Might Make You More Money.

Navitas Semiconductor got a lot of attention last year as its stock price surged some 376% for the year to more than $17 per share in late October.

The chipmaker's stock price has fallen back to roughly $9 per share as of March 19, but it is still up 23% year to date and 250% over the past 12 months.

Navitas' meteoric rise was fueled by several factors. One of the major catalysts was a new partnership with Nvidia to supply it with its gallium nitride (GaN) and silicon carbide (SiC) chips for AI data centers. These Navitas chips are considered faster and more efficient than traditional silicon wafers and will be used in Nvidia's next-generation data center architecture, starting in 2027.

Image source: Getty Images.

Also, Navitas is pivoting from providing chips for consumer markets -- smart phones, PC, and electronics -- to bigger power markets, like data centers, electric vehicles, and industrial.

Analysts expect to see revenue decline this year, due to the pivot, but bounce back in 2027 when the Nvidia contract kicks in.

Navitas stock has a median price target of $8 per share, which would suggest a 9% decline in the stock price. While Navitas stock could certainly be a stellar long-term option, it is still not consistently profitable and faces uncertainties with its pivot.

A more cautious investor may want to consider a less volatile AI stock, IBM (NYSE: IBM).

IBM pivots toward AI and quantum computing

IBM has made the transition from a computer hardware company to an AI powerhouse, focusing on AI consulting through its watsonX platform and cloud computing.

In 2025, IBM grew revenue by 8% and adjusted earnings by 12%. It also lifted its gross profit margin by 1.7 percentage points to 59.5%. For this fiscal year, it anticipates revenue growth of 5% and free cash flow to increase by about $1 billion.

In March, IBM signed an agreement with Nvidia for its watsonX AI platform to increase performance and reduce costs for the extraction of large AI datasets.

IBM also recently acquired Confluent and its data streaming platform, used by 40% of Fortune 500 companies. The smart data platform gives AI models and agents the data needed to operate across hybrid cloud environments. Typically, AI data is siloed and takes longer to access, so IBM is seeking to use Confluent to deliver data faster and securely at scale.

IBM is also a leader in quantum computing. It recently released a new "blueprint" for quantum supercomputing. Basically, the blueprint details how quantum computing architecture can work alongside GPUs and CPUs.

So, with its strong margins and cash flows, IBM is investing in its AI and quantum futures.

In addition, it has raised its dividend for 27 years in a row and currently pays out a high 2.67% yield.

Analysts are bullish on IBM stock, with a median price target of $340 per share, suggesting 36% upside. Further, IBM stock is reasonably valued with a forward price-to-earnings ratio of just 20.

IBM stock may not be prone to 376% price bursts like Navitas, but I think in both the near-term and the long-term, IBM has set itself up to be a consistent winner.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines and Nvidia. The Motley Fool has a disclosure policy.