3. NVIDIA Corporation (NASDAQ:NVDA)
5-year Revenue Growth: 64.2%
5-year Net Income Growth: 91.9%
Number of Billionaire Investors: 29
Number of Hedge Fund Holders: 223
Julian Lin, a reputed investor, believes that NVIDIA Corporation (NASDAQ:NVDA)’s recent sell-off amidst AI and tech stock routs provides a buying opportunity thanks to its competitive positioning, healthy balance sheet, and reasonable valuation. The investor believes that NVIDIA Corporation (NASDAQ:NVDA) has established a unique computing ecosystem based on the CUDA platform. This is the largest developer community for accelerated computing, which can provide the company with a competitive edge, says Lin.
Elsewhere, Phillip Securities analyst Yik Ban Chong maintained the bullish stance on the company’s stock, giving a “Buy” rating. The analyst’s rating is backed by factors including its healthy performance in critical segments and the strategic positioning for future growth. Notably, the strong growth in the automotive segment, due to the autonomous vehicle chips, as well as higher CAPEX from hyperscalers, can drive demand in the data center segment, says the analyst. These factors, together with NVIDIA Corporation (NASDAQ:NVDA)’s capability to cater to AI GPU demand, support the optimistic outlook. The company’s consistent technological leadership in GPU design and AI acceleration places it well for the AI revolution.
Guinness Global Innovators, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy intensive requirements of AI processes within datacentres. Initially possessing over 95% of market share in these types of chips, Nvidia have been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has 5 times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data centre segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centres and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”
