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When it comes to top artificial intelligence (AI) stocks to buy now, the primary one that investors seem to gravitate toward is Nvidia. The company wisely leveraged its core competencies in gaming and graphics processing units (GPUs) to the AI field, which benefited its stock greatly as demand for AI chips soared.

However, Nvidia stock has also risen to a nosebleed valuation, a factor that could set it up for a significant drop. Fortunately, the AI market is enormous, and other stocks appear to offer considerable growth potential. Hence, when looking for a stock to buy now, investors may earn higher returns by turning to a longtime Nvidia partner.

Instead of Nvidia, look to a Nvidia partner

Instead of Nvidia, investors may want to consider Super Micro Computer (NASDAQ: SMCI). Supermicro -- as it is usually called -- is a hardware company, and building servers powered by Nvidia's AI chips has become a game changer, to say the least. Its stock has grown 4,500% over the last five years, a growth rate that outpaces the 3,100% return Nvidia earned during that time.

SMCI data by YCharts.

This growth did not come fast. Supermicro came into existence in 1993. As a "rack-scale total IT solutions provider," it has manufactured environmentally friendly equipment for cloud, enterprise, metaverse, IoT, and 5G-based solutions. Despite offering this equipment in more than 100 countries, Supermicro was relatively unknown for most of its existence.

Nonetheless, its AI equipment has taken Supermicro to the cutting edge of the IT industry, accounting for most of Supermicro's all-time gains. Although it had partnered with Nvidia for several years, its Nvidia-powered AI systems on the edge have offered faster data-center power and, by extension, more power to Supermicro stock.

The case for buying Supermicro, despite massive gains

Given the aforementioned massive gains, investors might assume they are discovering Supermicro too late. Indeed, another 4,500% increase is not likely over a five-year time frame, but buying it could still pay off for investors.

In the first three quarters of fiscal 2024 (ended March 31), revenue came in at $9.6 billion, a 95% increase versus the same period in fiscal 2023. That led to a net income of $855 million for the first nine months of fiscal 2024, rising 92% as the cost of sales slightly outpaced revenue growth.

Also, despite its huge revenue increases, Supermicro does not see a slowdown in the immediate future. The company raised its fiscal 2024 guidance to the $14.7 billion to $15.1 billion range. That will amount to 110% yearly revenue growth at the midpoint, assuming the forecast holds.

More importantly, valuations are at reasonable levels when accounting for its considerable growth. Its trailing price-to-earnings (P/E) ratio is only 49, below Nvidia at 75 times earnings.

The contrast is starker when measured by the price-to-sales (P/S) ratio. Supermicro sells for only 4 times sales, a small fraction of Nvidia's 40 P/S ratio. Thus, when it comes to stock price growth potential, Supermicro should outpace its better-known partner over time.

Buy Supermicro

Despite past gains, Supermicro looks increasingly like the stock to own. Although it has already logged massive gains, the company appears positioned to maintain its growth rate for the foreseeable future.

Also, its considerable growth over the last five years does not appear to have fully incorporated into the stock price. With profit growth almost at triple-digit levels, a P/E ratio of under 50 amounts to a bargain, and its price-to-sales (P/S) ratio is only a small fraction of Nvidia's, confirming that this is still a relatively inexpensive stock.

Thanks to that low valuation and continuing growth, investors can still earn outsized returns in what is now a proven growth stock.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, consider this:

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Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.