In the race for supremacy in the artificial intelligence (AI) market, Nvidia (NVDA) has been a standout performer, with its stock surging 149% in the first half of 2024. However, there are indications that other companies in the AI server sector may provide better value and potential returns for investors.

Super Micro Computer (SMCI) has emerged as a strong contender, outperforming Nvidia with a stock rise of 188% this year. The company specializes in selling rack-mount systems for data centers, positioning it well to benefit from the growing demand for AI chips. Supermicro's plug-and-play rack systems featuring data center chips from Nvidia and Advanced Micro Devices are driving its impressive revenue growth, which saw a 200% surge year over year last quarter.

A key factor contributing to Supermicro's success is its close relationship with suppliers like Nvidia, enabling the company to deliver innovative solutions before its competitors. One of its noteworthy contributions is the development of direct liquid cooling solutions, which efficiently manage the heat generated by AI computing systems. Wall Street analysts expect Supermicro's earnings per share to grow at an annualized rate of 46%, higher than Nvidia's estimated 33%.

Moreover, Supermicro offers an attractive valuation compared to Nvidia. With a forward price-to-earnings (P/E) ratio of 35, Supermicro provides investors with more earnings growth for a lower price, potentially leading to superior returns.

Another company poised to outperform Nvidia in the AI server market is Dell Technologies (DELL). While Dell generates most of its revenue from client solutions, its infrastructure solutions business, including AI servers, is experiencing rapid growth. Last quarter, its revenue in this segment increased by 22% year over year, with AI server shipments more than doubling compared to the previous year.

Despite the impact of AI server sales on Dell's gross margin, the significant revenue growth expected in this business could support substantial earnings growth in the coming years. Dell's AI server backlog rose by approximately 31% in the last quarter, reaching $3.8 billion. Analysts believe that Dell won a larger portion of server business with Tesla than Supermicro, indicating the company's strong competitive position.

Wall Street analysts forecast a 12% annual earnings growth for Dell over the next several years, with the potential for even higher estimates once Dell's PC business recovers. With a forward P/E ratio of 18, Dell's stock appears attractive considering the anticipated acceleration in earnings growth.

While Nvidia has established itself as a leader in the AI chip market, the rising demand for AI servers presents an opportunity for companies like Super Micro Computer and Dell Technologies to outperform Nvidia in terms of growth and valuation. Investors looking for potential superior returns in the AI sector may consider exploring these alternative stocks that offer above-average growth at reasonable prices.

Disclaimer: The writer of this article may hold positions in Advanced Micro Devices, Nvidia, and Tesla. The Motley Fool also has positions in and recommends Advanced Micro Devices, Nvidia, and Tesla.