1. NVIDIA Corporation (NASDAQ:NVDA)
AQR Capital Management’s stake as of Q3: $1.95 billion
When it comes to the creation and production of graphics processing units (GPUs), application programming interferences (APIs), and system-on-a-chip (SoC) components, NVIDIA Corporation (NASDAQ:NVDA) arguable stands as king. The company plays an essential part in domains like data science and high-performance computing. AQR Capital’s portfolio consists of 16.27 million NVDA shares, worth about $1.95 billion.
In a note to clients, Oppenheimer named NVIDIA Corporation (NASDAQ:NVDA) as a standout among semiconductor stocks due to its dominance over the chips used to power AI applications and models, particularly in data centers. The firm stated that NVIDIA Corporation (NASDAQ:NVDA) remains the “largest volume producer of AI accelerators” in the world and continues to dominate the AI infrastructure market ahead of its competitors. Oppenheimer expects NVIDIA’s data center AI sales to hit the $172 billion mark in 2025.
In the third quarter of 2024, NVIDIA Corporation (NASDAQ:NVDA) reported record revenue of $35.1 billion, a 94% increase from the previous year. At $30.8 billion, the data center segment along saw a 112% increase. Over the last couple of years, the company’s GPU revenue has increased sharply by 67% yearly, primarily due to the increased demand for computational capacity brought on by advances in AI.
Manole Capital Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“As of this publication, Nvidia is up roughly 150% year-to-date. NVIDIA Corporation (NASDAQ:NVDA) was the largest gainer in the S&P 500 last year and has more than tripled in value over the last year. It hit an eye-opening market capitalization of $3 trillion in June, less than four months after it eclipsed the $2 trillion mark. Enthusiasm for everything AI-related, especially for the primary chip maker whose products are essential to powering AI technology, continues to fuel the market. Last quarter, and for the fifth consecutive quarter, Nvidia reported sales and profits that blew past Wall Street expectations. The stock rose +37% in the second quarter alone.”
While we acknowledge the potential of NVDA, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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