1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Investors: 179
Jim Cramer explains that NVIDIA Corporation (NASDAQ:NVDA) often appears expensive based on future earnings estimates, but it consistently surpasses those expectations, making the stock look undervalued in hindsight. This pattern has been a remarkable feature of NVIDIA Corporation (NASDAQ:NVDA) since 2012. Cramer advises investors not to focus too much on daily fluctuations in a stock’s price. Instead, it’s important to discern when these movements are meaningful signals versus when they are simply noise with no real significance.
“When you look at NVIDIA on forward earnings or estimates, it always looks expensive, and then it so far trumps those estimates that when you look backward, it turns out the stock was selling at a remarkably low price. That’s been the secret to NVIDIA literally since 2012—incredible! It just keeps doing that, right? Please don’t put too much significance on day-to-day gyrations in a stock’s share price. You have to know when something is a signal and when it’s all just sound and noise, always signifying nothing.”
NVIDIA Corporation (NASDAQ:NVDA) is a highly attractive investment due to its leading role in the semiconductor industry, particularly in GPUs and AI technologies, as well as its impressive financial performance and expanding market opportunities. As a dominant player in tech, NVIDIA Corporation (NASDAQ:NVDA) benefits from the rapid growth in AI, data centers, gaming, and autonomous vehicles.
In its Q2 FY2024 earnings report, NVIDIA Corporation (NASDAQ:NVDA) achieved record revenue of $13.51 billion, marking a 101% increase from the previous year. This growth is driven by exceptional demand for its GPUs, particularly those used in AI and data centers, with the Data Center segment seeing a 171% revenue boost. This underscores NVIDIA Corporation (NASDAQ:NVDA)’s pivotal role in supporting AI technologies and large language models.
NVIDIA Corporation (NASDAQ:NVDA)’s strong momentum is further supported by its strategic partnerships and innovative product offerings. NVIDIA Corporation (NASDAQ:NVDA) is a key player in the AI revolution, providing essential hardware to cloud providers, enterprises, and research institutions. Its recent collaborations to advance generative AI solidify its leadership position. Additionally, NVIDIA Corporation (NASDAQ:NVDA) is expanding into new areas such as automotive and edge computing, where its AI and GPU technologies are increasingly being adopted. NVIDIA Corporation (NASDAQ:NVDA)’s ongoing investment in research and development and its robust product pipeline keep it at the cutting edge of innovation.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA), our conviction lies in the belief that under the radar 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 the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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