5) NVIDIA Corporation (NASDAQ:NVDA)
Average Upside Potential: 36.0%
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a leading designer of discrete graphics processing units that enhance the experience on computing platforms. Joseph Moore of Morgan Stanley gave an “Overweight” rating on the company’s stock, providing a price target of $152. The analyst noted that China’s DeepSeek, an AI model matching its American rivals in performance and at a much cheaper cost, established some challenges for NVIDIA Corporation (NASDAQ:NVDA) around export controls and longer-term investment. Despite these challenges, Moore opines that near-term checks remain strong for its Hopper platform. The analyst believes that Blackwell’s supply visibility has been building and that customers’ desire to spend remains clearly visible.
Elsewhere, Ivan Feinseth of Tigress Financial upped the company’s stock to “Strong Buy,” raising its price objective to $220. Even though DeepSeek’s R1 AI model has been claiming competitive features at lower costs, Tigress Financial noted unknown capabilities and security concerns. The firm lauded NVIDIA Corporation (NASDAQ:NVDA)’s critical role in AI and data center growth and sees it as a long-term beneficiary of continued investments. Furthermore, lawmakers in the US have plans to ban DeepSeek.
The AI infrastructure build-out continues to act as a major tailwind for NVIDIA Corporation (NASDAQ:NVDA). Notably, cloud service providers, sovereign states, and consumer internet companies have been fueling demand for AI computing power. Fred Alger Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. Shares contributed to performance during the quarter, driven by strong demand for its data center products, especially the Hopper H200 chips, which generated double-digit billions in revenue, marking the fastest product ramp in the company’s history. Management provided fiscal fourth-quarter revenue guidance above analyst estimates, along with resilient operating margins supported by robust demand and limited competition. In our view, Nvidia’s leadership in scaling AI infrastructure, including advancements in inference and test-time scaling (i.e., reasoning during inference), is driving adoption among enterprises and startups, providing continued demand for its high-performance chips and software solutions. As older-generation chips are repurposed for inference and new clusters are deployed, we believe Nvidia is well-positioned to capitalize on growing compute needs across AI applications.”
