1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
The primary engine of NVIDIA Corporation (NASDAQ:NVDA)’s growth revolves around expanding AI and data center market. With companies throughout industries investing significantly in AI infrastructure, the company’s GPUs and specialized AI chips are in high demand. The roll out of the RTX Blackwell family as well as advancements in enterprise AI solutions such as the Cosmos platform exhibit NVIDIA Corporation (NASDAQ:NVDA)’s ability to develop new market opportunities.
NVIDIA Corporation (NASDAQ:NVDA)’s expansion into areas including robotics, automotive AI, and potentially Arm-based PC CPUs can result in significant new revenue streams. Such diversification efforts can help the company maintain its growth trajectory amidst increased competition in its core markets. NVIDIA Corporation (NASDAQ:NVDA)’s strong R&D capabilities, together with its extensive ecosystem of partners and developers, place it well to maintain the technology leadership in AI chips. Overall, the company’s focus on both hardware and software solutions for AI applications provides it a competitive edge in offering comprehensive solutions to customers.
Columbia Threadneedle Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) continued to outperform the market during the fourth quarter. The technology giant and top position in the fund delivered on sky-high expectations during the quarter and reported quarterly expectations that exceeded expectations. The red-hot company provided forward-looking expectations which were regarded as slightly lackluster as compared to prior quarters that smashed expectations. While the stock did churn a bit in the quarter, the AI giant remains top of mind for investors, especially as the company is on pace to satisfy the ‘staggering’ demand for its new product, Blackwell, which is poised to enter the market over the next year. The company’s position of owning all the major pieces of the evolving AI data center enables it to strengthen its competitive position and to define the technology roadmap for generations to come.”
While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued 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.
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