1. NVIDIA Corp. (NASDAQ:NVDA)
Upside Potential as of March 3: 40.09%
Number of Hedge Fund Holders: 223
NVIDIA Corp. (NASDAQ:NVDA) is a computing infrastructure company that provides graphics, compute and networking solutions worldwide. Offering GeForce GPUs, data center platforms, and AI software like Omniverse, it serves diverse markets. These include gaming, automotive, and data centers.
In FY25, the company generated a total of $115.2 billion in revenue, which was more than double as compared to FY24. FQ4 2025 alone saw a record revenue of $35.6 billion, which represented a 93% year-over-year surge. This improvement came from its data center segment, particularly by its Blackwell and Hopper 200 products. Blackwell sales reached $11 billion in FQ4. Customers are scaling infrastructure with clusters of 100,000+ GPUs. Inference demand is surging, with Blackwell offering up to 25x higher token throughput and 20x lower cost than Hopper 100.
Large cloud providers represent about 50% of the company’s data center revenue. FQ1 2026 revenue is projected at about $43 billion, with continued growth in data center and gaming. On February 25, Evercore ISI’s Mark Lipacis maintained a Buy rating on the company with a $190.00 price target. The firm noted strong hyperscaler preference for NVIDIA Corp.’s (NASDAQ:NVDA) ecosystem. The GPU demand is seemingly exceeding supply. AI advancements are also expected to further drive long-term growth.
Baron Fifth Avenue Growth Fund is highly positive on NVIDIA Corp. (NASDAQ:NVDA) due to its strong financial performance, dominant position in AI computing, and continued growth potential despite market uncertainties. It stated the following in its Q4 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a fabless semiconductor company specializing in compute and networking systems for accelerated computing and AI. Shares increased 10.6% for the quarter and were up 170.3% in 2024, on strong quarterly results, with record data center revenue, which surpassed $30 billion, driven by demand for its Hopper GPUs, while Gaming and Automotive also beat expectations. Key investor debates include the continued progress on improving the capability of AI models (e.g. scaling laws – see more in the outlook section below), transition from AI training to inference and the potential impact on competitive dynamics, and the pace of adoption of AI across industries. Despite near-term uncertainties, we maintain conviction in NVIDIA’s leadership in accelerated computing, driven by its ability to innovate and adapt to market shifts. With robust margins, a dominant data center presence, and a growing ecosystem across hardware and software, we believe NVIDIA is well positioned to capitalize on the structural growth in AI and high-performance computing.”
While we acknowledge the growth potential of NVIDIA Corp. (NASDAQ:NVDA), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. 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.
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