1. NVIDIA Corp. (NASDAQ:NVDA)
Share Price as of April 22: $96.91
Number of Hedge Fund Holders: 223
NVIDIA Corp. (NASDAQ:NVDA) is a computing infrastructure company that provides graphics and compute & networking solutions. Its products are used in gaming, professional visualization, data centers, and automotive markets. It sells its products to several customers, which include OEMs, original device manufacturers, system integrators & distributors, and independent software vendors.
NVIDIA’s Data Center segment made a record $35.6 billion in revenue in FQ4 2024, which was up 93% year-over-year. The Blackwell revenue totaled $11 billion in this quarter, which marked the fastest product ramp in the company’s history. However, Argus lowered the stock’s price target to $150 from $175 with a Buy rating on April 17. The firm believes that the fresh US licensing requirements for AI chip exports, which include NVIDIA’s H20 models, will impact quarterly earnings by as much as $55 billion.
NVIDIA Corporation (NASDAQ:NVDA) is positioned for continued growth, driven by its leadership in AI infrastructure, data center solutions, and gaming technology. NVIDIA’s revenue has more than doubled in each of the last two fiscal years. Its bargaining power is evident in its operating margin, which has expanded to 62.4% in 2024.
Guinness Global Innovators is highly bullish on NVIDIA Corp. (NASDAQ:NVDA) due to its dominant AI chip market position. It stated the following in its Q4 2024 investor letter:
“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy intensive requirements of AI processes within datacentres. Initially possessing over 95% of market share in these types of chips, Nvidia have been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has 5 times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data centre segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centres and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”
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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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