Nvidia shares fell after earnings. These 3 stocks could be better buys.

Investors may be increasingly uncertain as Nvidia trade seems to have taken place. Despite the company’s recent near-perfect earnings report, investors are selling the stock as doubts grow about its lofty valuation.

So investors may be wondering where to invest next. These three Motley Fool contributors have suggestions for three stocks that are more likely to rise: Meta platform (META -3.21%), monday.com (MNDY -3.23%)and Not Holdings (NOT -4.46%).

The investors should not be ignored this cash cow

Jake Lerch (Meta Platforms): With Nvidia losing some momentum in recent weeks, I turn my attention away from the king of artificial intelligence (AI) and to the king of digital advertising, Meta platforms..

Its stock has flown under the radar for much of 2024. While Nvidia and other high-profile AI stocks grabbed the headlines, Meta has soared 45% year-to-date. That makes it the fifth best performing stock in the Nasdaq 100.

Plus, its growth is due to good, old-fashioned execution. Meta, with more than 3 billion average daily users on its Facebook and Instagram platforms, continues to rake in cash like an ice cream shop stacks scoops during a heat wave.

The company generated nearly $50 billion in free cash flow over the past 12 months — nearly $19 per share.

META free cash flow per share; data by YCharts.

With so much money coming in, the company’s balance sheet is solid: over $58 billion in cash and the equivalent of just $38 billion in debt, for a net cash position of about $20 billion. With so much free cash flow, Meta has begun to return a sizable portion of that hoard to investors.

In In February, Meta announced its first dividend, a regular quarterly payment of $0.50 per share. At the current price, that’s a dividend yield of only 0.4%. However, it should not be ignored. In addition, management expanded its share repurchase program to $50 billion.

In combination, these two measures, along with Meta’s ample free cash flow, are why investors should consider the stock as a suitable alternative to Nvidia. This cash cow is simply too big to ignore.

This stock is poised for years of profitable growth

Justin Pope (luni.com): Every software stock looked like a winner in 2021, but higher interest rates created a more challenging economy where investors saw the cream rise to the top.

Monday.com turned out to be a winner, which should have investors salivating over the company’s long-term prospects. It is a software-as-a-service (SaaS) business that sells diverse and easily customizable work management software.

When Monday.com went public, it wasn’t clear that companies would actually stick with its product, but the results speak for themselves. Its excellent revenue growth includes a 34% year-over-year increase in the second quarter.

Monday.com has a 114% net revenue retention rate among customers spending more than $50,000 on the platform, and the number of companies spending that much grew faster than revenue in the second quarter, up 43% from from year to year. Currently, approximately 225,000 businesses use Monday.com, a large pipeline that will begin to generate significant revenue.

Financials are improving as the business also grows, with free cash flow of $261 million over the past four quarters on sales of $845 million. The company has $1.3 billion in cash and no debt and has been profitable under generally accepted accounting principles (GAAP) in recent quarters.

So Monday.com is no longer a speculative stock; is a financially stable company that could enjoy strong earnings growth.

It’s among some of the most expensive tech stocks on Wall Street, but quality rarely comes cheap. The stock trades at an enterprise value-to-sales ratio of just over 11, still much less than Palantir and CrowdStrike. Long-term investors can still buy Monday.com today and enjoy years of strong investment returns from profitable growth.

Consider following Warren Buffett’s team in this Latin American fintech

Will Healy (Not Holdings): When looking for new bull markets, undervalued stocks can be a great place to start. Among fintechs, perhaps few are less understood by American investors than Nu Holdings, parent of NuBank.

The stock has attracted attention from Warren Buffett Berkshire Hathawaywho bought it after the initial public offering. But despite attracting Buffett’s interest, most American investors can be forgiven for not knowing Nu.

Even though it is the largest digital bank outside of Asia, most of its customers are in Brazil. Now, with its success there, it is trying to replicate its formula in Mexico and Colombia.

Unlike the US, the banking system in Latin America has traditionally been dominated by a small number of banks. The dominance these banks have over their countries has left large percentages of the population without bank accounts or credit cards.

NuBank changed that by issuing credit cards to millions of previously unbanked customers. Also, as a digital bank, the lower overhead costs that come with non-operating branches have helped it build a competitive advantage. Its approach is so successful that nearly 21 million of its 105 million customers have opened their first Nu account in the past year.

It is not surprising that such an increase appeared in the financial situation. In the first two quarters of 2024, revenue of $5.6 billion was up 60% compared to the same period in 2023.

During this time, Nu kept operating expenses under control. This allowed it to achieve a net income of $866 million in the first half of 2024, 136% more than in the first six months of 2023.

Investors began to take notice. The stock has risen steadily over the past year, more than doubling in the past 12 months. Still, despite that growth, it’s selling at a price-to-earnings (P/E) ratio of 45, a low level considering triple-digit profit growth for the year.

Overall, such conditions indicate undervaluation, which implies that its growth may continue. If investors can overlook the different financial culture in Latin America, they can still take advantage of this tremendous opportunity.