1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a leading global provider of graphics, compute, and networking solutions, known for its technologies that cater to various markets, including gaming, professional visualization, data centers, and automotive applications. Within its Graphics segment, NVIDIA offers GeForce GPUs designed for gaming, the GeForce NOW streaming service, and Quadro/NVIDIA RTX GPUs tailored for enterprise graphics. Additionally, the company develops software solutions.
Cramer commented on the excitement surrounding the company and said:
“Nvidia’s Jensen Huang will be ringing the Nasdaq opening bell with his team to celebrate the birth of the GPU 25 years ago. Those are the faster chips that make generative AI work. Congratulations to the NVIDIA team.”
NVIDIA (NASDAQ:NVDA) first gained recognition with the launch of the GeForce 256 in 1999, which was hailed as the world’s first graphics processing unit (GPU). It revolutionized gaming by delivering smoother graphics and higher frame rates, ultimately shaping the future of computer graphics and gaming experiences.
Over the years, the company expanded its focus beyond gaming and has made a name for itself, especially in AI. Recently, CEO Jensen Huang highlighted the overwhelming demand for NVIDIA’s next-generation AI chip, Blackwell, calling it “insane.”
Huang expressed that the rapid pace of technological advancement presents an opportunity for the company to intensify its innovation efforts. He emphasized the goal of advancing capabilities, increasing throughput, and reducing both costs and energy consumption.
Blackwell is set to be priced between $30,000 and $40,000 per unit, and demand is high from major corporations such as Microsoft and Meta, which are establishing AI data centers to support applications like ChatGPT and Copilot.
Generation Investment Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Recent net performance is behind market averages. However since the fund’s inception, we have spent only about 8% of the time underperforming on a rolling five-year basis.1 We do not enjoy these spells. A number of different factors has contributed to the current period of underperformance. The fact that we do not own NVIDIA Corporation (NASDAQ:NVDA) is one. That single company accounted for roughly 25% of returns in the benchmark so far this year, meaning almost everyone who does not own Nvidia has lost out. Year-to-date, not owning Nvidia explains about a third of our relative underperformance.
Nvidia is, clearly, an earnings juggernaut. In the past year its revenue has more than tripled, as cloud companies load up on hardware to power AI models. So while its earnings multiple has increased, we are not seeing a repeat of the dotcom mania of the late 1990s. This company’s valuation is backed by cold, hard cash…” (Click here to read the full text)
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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